New Melones Lake Commercial Services Study and Financial Feasibility Evaluation (Final)

U.S. Department of the Interior Bureau of Reclamation Mid-Pacific Region Central Area Office Sacramento, CA April 2011

Mission Statements

The mission of the Department of the Interior is to protect and provide access to our Nation’s natural and cultural heritage and honor our trust responsibilities to Indian Tribes and our commitments to island communities.

The mission of the Bureau of Reclamation is to manage, develop, and protect water and related resources in an environmentally and economically sound manner in the interest of the American public.

Contents

Contents

Page Chapter 1 Introduction ...... 1-1 1.1 Resource Management Plan ...... 1-4 1.2 Public Involvement ...... 1-4 1.3 Environmental Compliance ...... 1-5 1.4 Reclamation Concessions Policy ...... 1-5 1.5 Relationship to Concessions Prospectus ...... 1-7 1.6 Outline of Report ...... 1-7 Chapter 2 Overview of New Melones Lake ...... 2-1 2.1 Management at New Melones Lake ...... 2-1 2.1.1 Management Policies, Guidance, and Studies ...... 2-1 2.1.2 New Melones Lake Management Areas ...... 2-2 2.2 Recreation Resources at New Melones Lake ...... 2-4 2.2.1 Recreation Activities...... 2-4 2.2.2 Recreation Areas ...... 2-5 2.2.3 Recreation Facilities ...... 2-7 2.3 Recreation Use and Visitation ...... 2-15 2.4 Commercial Services and Concessions ...... 2-15 2.4.1 New Melones Lake Marina...... 2-15 2.4.2 Other Commercial Services ...... 2-19 Chapter 3 Regional Recreation Facilities and Commercial Services ...... 3-1 3.1 Supply of Recreation Resources ...... 3-1 3.1.1 Water-Based Recreation Facilities near New Melones Lake ...... 3-1 3.1.2 Comparable Water-Based Recreation Facilities Statewide ...... 3-9 3.1.3 Summary and Comparison of Facilities with New Melones Lake ...... 3-14 3.1.4 Private Recreation-Oriented Businesses in Local Area ...... 3-15 3.2 Demand for Recreation Resources...... 3-16 3.2.1 Measures of Existing Recreation Demand at New Melones Lake ...... 3-17 3.2.2 Regional Recreation Demand ...... 3-22 3.2.3 Trends in Recreation Use ...... 3-24 3.2.4 Other Factors Influencing Recreation Demand ...... 3-26 3.2.5 Conclusions Regarding Recreation Demand ...... 3-28 Chapter 4 Review of Commercial Service Opportunities ...... 4-1 4.1 Criteria for Evaluation ...... 4-1 4.2 Commercial Service Opportunities Subject to Evaluation ...... 4-2 4.2.1 Marina Services: Berths and Moorings ...... 4-2 4.2.2 Marina Services: Dry Boat Storage ...... 4-4 4.2.3 Marina Services: Boat Repair ...... 4-5 4.2.4 Marina Services: Motorized Watercraft Rentals ...... 4-5 4.2.5 Marina Services: Non-Motorized Watercraft Rentals ...... 4-6 4.2.6 Food and Drink Service ...... 4-6 4.2.7 Recreation Supply and Convenience Store ...... 4-7 4.2.8 Lake Tours and Cruises ...... 4-7

i FINAL – April 2011 New Melones Lake Commercial Services Study & Financial Feasibility Evaluation

4.2.9 RV Park...... 4-8 4.2.10 Lodging ...... 4-8 4.2.11 Horseback Riding Stables ...... 4-8 4.2.12 Adventure Outfitter Guide Services ...... 4-9 4.2.13 Event Venue ...... 4-9 4.2.14 Mountain Bike Course or Park ...... 4-10 4.2.15 Whitewater Rafting (Guided) ...... 4-10 4.2.16 Fishing Guide Services ...... 4-10 4.2.17 Seaplane School ...... 4-11 4.2.18 OHV Course ...... 4-11 4.2.19 Skeet & Target Shooting...... 4-11 4.2.20 Summary of Commercial Service Opportunities ...... 4-11 4.3 Location of Potential Commercial Services ...... 4-12 Chapter 5 Resource Opportunities and Constraints ...... 5-1 5.1 GIS-Based Site Selection Analysis ...... 5-1 5.2 Resource Opportunities and Constraints ...... 5-1 5.3 Site Suitability ...... 5-4 Chapter 6 Engineering Review ...... 6-1 6.1 Field Condition Assessment ...... 6-1 6.2 Cost Estimates ...... 6-4 Chapter 7 Financial Feasibility Evaluation ...... 7-1 7.1 Overview of Financial Feasibility Studies ...... 7-1 7.1.1 Role of Financial Feasibility in Business Planning ...... 7-1 7.1.2 Measures of Financial Feasibility ...... 7-2 7.2 Financial Feasibility in the Commercial Service Planning Process...... 7-3 7.2.1 Key Factors Affecting Financial Feasibility ...... 7-4 7.2.2 Financial Feasibility Framework ...... 7-6 7.3 Financial Feasibility of Proposed Commercial Services at New Melones Lake ...... 7-7 7.3.1 Analytical Assumptions ...... 7-7 7.3.2 Marina Services ...... 7-8 7.3.3 RV Park...... 7-12 7.3.4 Equestrian Stables ...... 7-14 7.4 Sensitivity Analyses of Financial Feasibility ...... 7-18 7.4.1 Variation in Operating Assumptions ...... 7-18 7.4.2 Variation in Capital Cost Estimates ...... 7-20 Chapter 8 Summary and Recommendations...... 8-1 8.1 Summary of Information...... 8-1 8.2 Recommendations for Commercial Services at New Melones Lake...... 8-1 8.2.1 Existing Commercial Services ...... 8-1 8.2.2 New Commercial Services...... 8-1 8.2.3 Location of Commercial Services...... 8-2 8.2.4 Seasonal Considerations ...... 8-2 8.2.5 Management of Commercial Services ...... 8-3 Chapter 9 References ...... 9-1

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Tables

Table 2-1A. Recreation Facilities at New Melones Lake ...... 2-9 Table 2-1B. Recreation Facilities at New Melones Lake ...... 2-10 Table 2-1C. Recreation Facilities at New Melones Lake ...... 2-11 Table 2-2. New Melones Lake Marina Approved Rates (2009) ...... 2-17 Table 2-3. New Melones Lake Marina Approved Rates (2009) – Houseboat Rentals ...... 2-18 Table 3-1. Summary of Recreation and Commercial Facilities at Waterbodies within Approximately 30 Miles of New Melones Lake ...... 3-3 Table 3-2. Recreation Visitation at New Melones Lake (2004-2008) ...... 3-17 Table 3-3. Average Recreation Visitation by Month at New Melones Lake (2004-2008) ...... 3-18 Table 3-4. Estimated Weekend and Weekday Recreation Facility Occupancy Rates at New Melones Lake by Season ...... 3-19 Table 3-5. Population Projections in the Primary Market Area Serving New Melones Lake ... 3-25 Table 4-1. Summary of Commercial Services and Recommendation ...... 4-12 Table 6-1. Condition Assessment Summary ...... 6-2 Table 6-2. Condition Assessment Detail ...... 6-2 Table 7-1. Capital Investment Costs for Marina-Related Services...... 7-9 Table 7-2. Operating Revenues and Expenses for Marina-Related Services ...... 7-10 Table 7-3. Cash-Flow Analysis for Marina-Related Services ...... 7-11 Table 7-4. Results of the Financial Feasibility Analysis for Marina-Related Services ...... 7-11 Table 7-5. Capital Investment Costs for RV Park ...... 7-12 Table 7-6. Operating Revenues and Expenses for RV Park ...... 7-13 Table 7-7. Cash-Flow Analysis for RV Park ...... 7-14 Table 7-8. Results of the Financial Feasibility Analysis for RV Park ...... 7-14 Table 7-9. Capital Investment Costs for Equestrian Riding Stables ...... 7-15 Table 7-10. Operating Revenues and Expenses for Equestrian Riding Stables ...... 7-16 Table 7-11. Cash-Flow Analysis for Equestrian Riding Stables ...... 7-17 Table 7-12. Results of the Financial Feasibility Analysis for Equestrian Riding Stables ...... 7-17 Table 7-13. Sensitivity Analysis of Financial Feasibility for Marina Services 1,2 ...... 7-18 Table 7-14. Sensitivity Analysis of Financial Feasibility for RV Park 1,2 ...... 7-19 Table 7-15. Sensitivity Analysis of Financial Feasibility for Equestrian Riding Stables 1,2 ..... 7-20 Table 7-16. Sensitivity Analysis of Financial Feasibility for Marina Services (Capital Costs Only) 1,2 ...... 7-21

iii FINAL – April 2011 New Melones Lake Commercial Services Study & Financial Feasibility Evaluation

Figures

Figure 1-1. Project Location ...... 1-2 Figure 1-2. New Melones Planning Area Boundary ...... 1-3 Figure 2-1. New Melones Management Areas ...... 2-3 Figure 2-2. Recreation Areas and Zones...... 2-6 Figure 3-1. Water-Based Recreation Facilities in Proximity to New Melones Lake ...... 3-2 Figure 3-2. Other Major Water Bodies in California ...... 3-10 Figure 3-3. Water Elevations at New Melones Lake (1990-2009) ...... 3-27 Figure 5-1. Opportunities in Site Selection Analysis...... 5-2 Figure 5-2. Constraints in Site Selection Analysis ...... 5-3 Figure 5-3. Results of Site Selection Analysis...... 5-5

Appendices

Appendix A Reclamation Guidance on Concessions Management Appendix B Engineering Review Technical Memorandum Appendix C Financial Feasibility Model – Analytical Assumptions Appendix D Financial Feasibility Model – Result Tables

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Abbreviations and Acronyms

BLM Bureau of Land Management CORP California Outdoor Recreation Plan CSS Commercial Services Study CVP EBIDTA Earnings Before Interest, Depreciation, Taxes and Amortization EBMUD East Bay Municipal Utilities District EIS Environmental Impact Statement FFE Financial Feasibility Evaluation IRR Internal Rate of Return NEPA National Environmental Policy Act NPV Net Present Value O&M Operations and Maintenance PG&E Pacific Gas and Electric Company RIR Resource Inventory Report ROI Return on Investment RMP Resource Management Plan SRA State Recreation Area USACE U.S. Army Corps of Engineers USFS United States Forest Service WROS Water Resources Opportunities Spectrum

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Chapter 1 Introduction

Chapter 1 Introduction

New Melones Lake is a located in the foothills of and is operated for multiple purposes, including control, and municipal water supplies, hydroelectric production, recreation, water quality, and fish and wildlife enhancement (Figure 1-1). The Bureau of Reclamation (Reclamation) administers all aspects of reservoir operations, including the recreation opportunities provided throughout the New Melones Lake Planning Area,1 hereafter referred to as “New Melones Lake” (Figure 1-2).

To enhance the visitor experience at New Melones Lake, Reclamation has prepared this Commercial Services Study (CSS) and associated Financial Feasibility Evaluation (FFE) that evaluates opportunities for a range of recreation-related commercial services at the reservoir. The primary purpose of the CSS is to identify commercial services and facilities that are determined to be necessary and appropriate for New Melones Lake based on a systematic review of potential opportunities. The FFE focuses on the financial viability of commercial services under consideration at New Melones Lake and serves as an important indicator of the long-term success of these commercial operations. Information from this study will be used to develop implementation actions to plan, authorize, and manage future commercial services at New Melones Lake in accordance with commercial service planning policies and directives administered by Reclamation.

For this study, the term commercial services is intended to cover all commercial operations under consideration at New Melones Lake, including concessions2 (managed under contract) and other commercial activities (managed in accordance with the special use permit process). Reclamation will determine which commercial services would be subject to concessions contracts or special use permits at the appropriate time in the commercial services planning process.

1 The Planning Area covers all Reclamation-administered lands associated with the New Melones Project in Tuolumne and Calaveras Counties, California. 2 A concession is a non-Federal commercial business that supports appropriate public uses and provides facilities, goods, or services for which revenues are collected. A concession involves the use of the Federal estate and usually involves the development of real property improvements.

1-1 FINAL – April 2011 Murphys Redding Map area

Sacramento

San Francisco

Fresno

Bakersfield 4

Los Angeles

San Diego Altaville

Angels Camp

Columbia

4

CALAVERAS COUNTY 49

Sonora 108

New Melones Jamestown Lake

TUOLUMNE

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120

STANISLAUS COUNTY URS Corp - Oakland CA - C.Raumann Project Location

New Melones Lake Area, California Central California Area Office

02 4 MILES Figure 1-1 4

CALAVERAS COUNTY 4

49

TUOLUMNE COUNTY

108

New Melones Lake \\S021emc2\gisdata\Projects\New_Melones_CSP-FFE\Maps\NewMelones_Fig1-2_Planning_Area_BOR.mxd - 2/15/2010 @ 12:24:25 PM

108 URS Corp - Oakland CA - C.Raumann New Melones Planning Area Boundary

New Melones Lake Area, California Central California Area Office

02 4 MILES Figure 1-2 New Melones Lake Commercial Services Study & Financial Feasibility Evaluation

1.1 New Melones Lake Resource Management Plan

A comprehensive Resource Management Plan (RMP) and Environmental Impact Statement (EIS) have recently been prepared for New Melones Lake.3 The Draft RMP/EIS was released to the public in October 2009 and presents a range of alternatives for managing Reclamation-administered lands within the New Melones Lake Planning Area. The record of decision on the Draft RMP/EIS was signed in June 2010. The EIS presents an analysis of the environmental effects expected from implementing the actions defined in the RMP. More specifically, the Draft RMP/EIS addresses the interrelationships among the various resources in the planning area and provides management options to balance resource management goals in accordance with Reclamation’s mission and authority with the public use of federal lands. The Draft RMP/EIS contained four management alternatives: Alternative A (No Action – Continue Current Management); Alternative B (Increased Use); Alternative C (Conservation); and Alternative D (Multiple Use). Alternative D balances management of recreational uses and natural and cultural resources, and was developed by combining aspects of the other three alternatives; it is the preferred alternative identified by Reclamation.

There are several links between the RMP/EIS and this study. First, the commercial service planning process is specifically referenced in the RMP, which notes that the results of the CSS process may affect the management alternatives, including land use allocations. Second, the RMP alternatives include a range of commercial service opportunities for New Melones Lake, albeit at a programmatic, rather than site-specific, level. Accordingly, the RMP provides initial direction for the commercial services planning process and provides the framework that can be used to determine consistency between the CSS and RMP. However, this CSS is based on a more detailed, independent analysis of commercial opportunities at the reservoir, recognizing the recreation management objectives proposed in the RMP Preferred Alternative.

1.2 Public Involvement

Public outreach associated with future commercial services at New Melones Lake was conducted as part of the public involvement process for the development of the RMP/EIS. As part of this process, Reclamation held several scoping meetings and alternatives development workshops to solicit issues and concerns from the public and to develop alternatives.4 The scoping meetings and alternatives workshops occurred in January 2007 and September 2007, respectively. Subsequently, open house meetings were held in September 2008 to solicit public input on initial portions of the Draft RMP/EIS.5 Most recently,

3 U.S. Bureau of Reclamation, 2009a 4 U.S. Bureau of Reclamation, 2007a 5 U.S. Bureau of Reclamation, 2008a

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public meetings were held in December 2009 to obtain comments on Public Draft RMP/EIS that was released in October 2009. In addition, public input was solicited for several preliminary planning efforts leading up to the preparation of the RMP/EIS, including the Visitor Capacity study (2003); Water Resources Opportunity Spectrum (WROS) study (2002); and the Peoria Wildlife Management Area (WMA) Environmental Assessment (EA) (2007). Further, public input was obtained directly from on-site visitor and telephone surveys conducted in 2007.6 Lastly, input on the commercial service planning process came directly from telephone interviews with the existing concessionaire and operators of local businesses surrounding the reservoir between October 2009 and March 2010. Through these efforts, information was collected from the public that provided perspective on potential commercial services and the needs and desires of reservoir users, existing commercial operators, local communities, and other stakeholders. All of the public input obtained from these efforts was reviewed for relevance to the commercial services planning process at New Melones Lake.

1.3 Environmental Compliance

As a planning study, this CSS/FFE is not subject to environmental compliance requirements under the National Environmental Policy Act (NEPA). At the time that any prospective commercial service is considered for development, it will require the appropriate level of environmental compliance and documentation pursuant to NEPA and all other applicable regulations. To the extent that proposed commercial services are consistent with the range of alternatives considered in the New Melones Lake RMP/EIS, the environmental analysis presented in the RMP/EIS provides a programmatic level of compliance. However, when specific commercial service developments are proposed for implementation, a site-specific environmental analysis will be conducted and appropriate environmental document prepared prior to authorization from Reclamation for the implementation of any commercial service operation proposed at New Melones Lake.

1.4 Reclamation Concessions Policy

This CSS has been prepared in accordance with Reclamation’s formal guidance on concessions management as outlined in its Concession Management Guidelines (Reclamation 2005) and the Reclamation Manual (including Policies7 and Directives and Standards8 related to the provision of concessions at Reclamation facilities). Relevant sections from these guidance documents are included in Appendix A.

6 U.S. Bureau of Reclamation, 2008b 7 Reclamation Manual Policy LND P02 (Concessions Management) 8 Reclamation Manual Directives and Standards LND 04-01 (Concessions Management by Reclamation) and LND 04-02 (Concessions Management by Non-Federal Partners)

1-5 FINAL – April 2011 New Melones Lake Commercial Services Study & Financial Feasibility Evaluation

Specifically, recreation opportunities provided by private commercial businesses under contract with Reclamation, e.g., concessions, may be authorized under Reclamation Manual Policy LND-04-01. That policy states that the issuance of concessions contracts is to be based on the results of a commercial services planning process that includes public involvement, financial feasibility, and environmental analysis. This process results in a CSS that: (1) determines the number, type, and duration of concessions necessary to meet the public demand for services and quality recreation opportunities; (2) evaluates the financial feasibility of the concessions considered; and (3) identifies locations for which such commercial services may be appropriate.

The following is a summary of key criteria required by Reclamation policy whenever commercial service planning is conducted and which serves as the basis for the analysis presented in this CSS:  Facilities and services shall be necessary and appropriate to meet both current and future demand for broad spectrum public use and enjoyment.  Commercial facilities shall not be developed or expanded on the federal estate if existing facilities, both on and off the federal estate, adequately meet current and projected needs.  Facilities and services shall reflect the general public needs rather than the desires of a particular individual or group.  Facilities and services shall be compatible with Reclamation project purposes.  Facilities and services considered to be exclusive use shall not be allowed or considered.  Potential impacts to natural and cultural resources shall be considered in the development of facilities and services.  Facilities must be harmonious in form, line, color, and texture with the surrounding landscape.  Consideration of whether existing concessions facilities should be relocated.  Determination of whether the condition and useful life of existing facilities proposed to be retained as a part of any new concession are sufficient to last through the duration of a new contract period.

The Financial Feasibility Evaluation (FFE) assessed the financial viability of any proposed concession operations, proposed length of term of the concession agreement, and the underlying assumptions regarding concessionaire capital investment in the concession. Financial planning criteria considered included:  Gross revenue by operating department.

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 Operating expenses (i.e., direct expenses, unallocated expenses, general and administrative expenses, fixed expenses, and franchise fees).  Earnings before interest, depreciation, taxes, and amortization (EBIDTA).  Capital investment costs.  Cash flow analysis.  Other factors (e.g., length of season, seasonal rates, visitation, inflation, cost of capital and the appropriate return rate to the concessionaire).

1.5 Relationship to Concessions Prospectus

The information presented in this CSS/FFE will be used to develop a concessions prospectus that is designed to solicit proposals from interested parties on the next term of concession contracts for the development, operation, and maintenance of commercial services and facilities at New Melones Lake. The prospectus will outline one or more commercial service opportunities recommended at New Melones Lake based on the results of this study and will reflect all of Reclamation’s policies and authorities relative to concessions management. The concessions prospectus will consider both possible continuation of existing concessions services offered at the reservoir, as well as new opportunities identified in this study.

The forthcoming concessions prospectus will likely differ from typical prospectuses, which normally provide little flexibility to offerors in regard to what will be the primary services, facilities, and core business offered at a particular location. Because the commercial service planning process may provide for both modifications to existing concessions operations and new businesses opportunities, the existing model for concessions contracts at New Melones Lake may not fully apply. Consequently, the prospectus will likely provide more flexibility than normal in the provision of commercial services and related business arrangements.

1.6 Outline of Report

This study is organized into seven sections. Following this Introduction, Chapter 2 presents a comprehensive overview of New Melones Lake, including key physical features and management characteristics relevant to commercial services planning. It also provides a detailed inventory of recreation resources and existing concessions at the lake. Chapter 3 describes the regional recreation environment, including the supply of available recreation resources in the region as well as information on recreation demand and trends. Chapter 4 provides a detailed review of prospective commercial service opportunities at New Melones Lake, based on key planning criteria developed for this study.

1-7 FINAL – April 2011 New Melones Lake Commercial Services Study & Financial Feasibility Evaluation

Based on this review, a set of commercial services are identified for further consideration. In Chapter 5, these opportunities are evaluated in the context of resource-based considerations specific to the planning area, and an engineering review of existing marina facilities is presented in Chapter 6. The financial feasibility of selected commercial service opportunities is presented in Chapter 7. Chapter 8 synthesizes the information from the preceding chapters into a set of recommended commercial services at New Melones Lake, with consideration of location, seasonality, contract duration, and other management factors.

1-8 FINAL – April 2011 Chapter 2 Overview of New Melones Lake

Chapter 2 Overview of New Melones Lake

This section presents a general overview of New Melones Lake, particularly on recreation-related features which have a direct influence on commercial service opportunities in the planning area. Portions of the information presented here are based on the Resource Inventory Report (RIR) that was prepared in support of the RMP/EIS process.9

New Melones Lake is in the central Sierra Nevada foothills in Calaveras and Tuolumne counties. Nearby communities include Altaville, Angels Camp, Columbia, Springfield, Sonora, Copperopolis, and Jamestown. The climate is semi-arid, with hot, dry summers and cool, wet winters.

The reservoir has a capacity of approximately 2.4 million acre-feet at gross pool elevation (1,088 feet), with a surface area of about 12,500 acres and over 100 miles of shoreline at capacity. The reservoir was developed primarily for flood protection along the Stanislaus and Lower San Joaquin Rivers. However, it serves multiple purposes, including irrigation, municipal and industrial water supply, power generation, fishery enhancement, water quality improvement, and recreation.

2.1 Management at New Melones Lake

The New Melones was constructed on the by the U.S. Army Corps of Engineers. Construction was completed in 1978. Subsequently, management authority for the New Melones Unit was transferred from the U.S. Army Corps of Engineers (USACE) to Reclamation in 1979 for integration into the Central Valley Project (CVP). Reclamation maintains an administrative office at the reservoir for day-to-day operations, including administrative, planning, and operations and maintenance (O&M) functions.

2.1.1 Management Policies, Guidance, and Studies Management at New Melones Lake follows Reclamation’s mission, which is “to manage, develop, and protect water and related resources in an environmentally and economically sound manner in the interest of the American public.”10 In addition, all Reclamation lands are to be managed in accordance with the Reclamation Manual, which consists of a series of Policies and Directives and Standards, as well as applicable federal law, such as the

9 U.S. Bureau of Reclamation, 2007b 10 Reclamation website: (www.usbr.gov/main/about/mission.html)

2-1 FINAL – April 2011 New Melones Lake Commercial Services Study & Financial Feasibility Evaluation

Reclamation Recreation Management Act of 1992 (Public Law [P.L.] 102-575, Title 28 [2805(c)(1)(A)].

Historic management on Reclamation-administered lands in the planning area has been based on the New Melones Lake Area Master Plan (Master Plan), approved in 1976 and subsequently amended. As described earlier, a Record of Decision was signed in June 2010 for a new RMP/EIS that supersedes the Master Plan and provides new management direction for New Melones Lake. Additional management guidance and planning studies specific to New Melones Lake, and incorporated by reference into this document, include:  Final Peoria Wildlife Management Area Environmental Assessment11  Draft New Melones Lake Fire Management Plan12  Vegetation Management Plan13  Revised Cave Management Plan14  New Melones Lake, Water Recreation Opportunity Spectrum, Inventory and Management Alternatives15  Visitor Capacity Analysis, New Melones Lake Resource Area Management Area16

2.1.2 New Melones Lake Management Areas The RMP/EIS establishes designated management areas that are used to help delineate management actions applicable to distinct parts of the planning area. In total, the planning area is organized into the following 18 management areas (Figure 2-1):

11 Reclamation 2007c 12 Reclamation 2006 13 Reclamation 1997 14 Reclamation 1996 15 Aukerman, Haas & Associates 2008 16 Haas 2003

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1. Bear Creek 2. Bowie Flat 3. Camp Nine 4. Carson 5. Creek 6. Dam & Spillway 7. French Flat 8. Glory Hole 9. Greenhorn Creek 10. Mark Twain 11. Middle Bay 12. North Bay 13. Parrotts Ferry 14. Peoria Wildlife Area 15. South Bay 16. Stanislaus River Canyon 17. Tuttletown 18. Westside

2.2 Recreation Resources at New Melones Lake

New Melones Lake offers a broad range of outdoor recreation activities. Although flood control, water supply, and power generation are considered the primary purpose for the lake, recreation plays a key role in defining the character of the lake and is the primary focus for visitors to the reservoir. This section describes the recreation activities available at the lake; designated recreation area and facilities managed by Reclamation; and an overview of existing commercial services at the lake. This information is used in the analysis of recreation supply and demand in the local area and region presented in Chapter 3 and in the evaluation of potential concession opportunities discussed in Chapter 4.

2.2.1 Recreation Activities The variations in natural features and expansive water surface area at New Melones Lake support a wide range of outdoor recreation activities throughout the planning area. The primary recreation activities at the lake are water dependent or water enhanced. Water-dependent activities include boating and sailing, kayaking and canoeing, waterskiing and wakeboarding, fishing, and

2-4 FINAL – April 2011 Chapter 2 Overview of New Melones Lake

swimming. Land-based activities in the planning area that are enhanced by proximity to the lake include general day use (e.g., picnicking, hiking, wildlife viewing, etc.), camping, hunting (in designated areas), rock climbing, mountain biking, horseback riding, and spelunking. Day use is permitted in all recreation and outlying areas around the lake, although day-use parking and picnicking are not permitted in the campgrounds. Overall, boating and boating-related activities are the predominant recreation activities occurring at New Melones Lake.17

2.2.2 Recreation Areas Reclamation manages and maintains several designated recreation areas and related facilities that focus recreation activity in certain locations. The three primary recreation areas that serve visitors to New Melones Lake are: (1) Glory Hole Recreation Area, (2) Tuttletown Recreation Area, and (3) Mark Twain Recreation Area containing the New Melones Lake Visitor Center and Museum. Recreational facilities found at these developed recreation areas include campgrounds, day use areas (picnic sites), boat ramps, beaches, trails, restrooms, access roads, and parking lots. Most of the current recreation demand at the lake can be met by facilities in these developed areas, excluding periods when water levels are high and when visitation is at a peak.

Several undeveloped recreation areas around the lake also help accommodate recreation use. Generally, all of the recreation areas are open for year-round operation, excluding seasonal closures for resource recovery actions and required maintenance. Figure 2-2 shows the location of these areas and their Water Resources Opportunities Spectrum (WROS) classification.

Glory Hole Recreation Area Glory Hole Recreation Area is in the mid-basin area of the lake and is accessed from Highway 49 near the community of Angels Camp in Calaveras County. It includes two campground areas (Big Oak and Ironhorse); two boat launch areas (Glory Hole Point and ); three day use areas (Black Bart, Buck Brush, and Osprey Point); and the New Melones Lake Marina. Several trails at Glory Hole serve hikers and mountain bikers. The Glory Hole area also includes a swim beach (near the Angels Creek Area), a fish cleaning station, dump station, and an amphitheatre that serves the two campgrounds.

17 Additional information on recreation preferences is available from the on-site and telephone survey, which is summarized in more detail in Section 3.2.1.

2-5 FINAL – April 2011 Figure 2-2 Chapter 2 Overview of New Melones Lake

Tuttletown Recreation Area Tuttletown Recreation Area is 8 miles south of the Glory Hole Recreation Area on the eastern side of the lake in Tuolumne County. It is also accessed from Highway 49. Three developed campgrounds in the Tuttletown area include Acorn, Manzanita, and Chamise. Others include the Oak Knoll and Fiddleneck Group Camps. Tuttletown is served by three day-use areas (Eagle Point, Lupine, and Heron Point) and one boat launch near the Eagle Point area. It also contains several trails for hikers and mountain bike riders, as well as a fish cleaning station and dump station.

New Melones Visitor Center and Museum The New Melones Lake Visitor Center and Museum is adjacent to Reclamation administrative offices and maintenance yard and is accessed from Highway 49 just south of the Stevenot Bridge. The Visitor Center and Museum offer exhibits on the use of the Stanislaus River by prehistoric and historic peoples, as well as natural resources, and local and regional recreation information.

Other Outlying Recreation Areas New Melones Lake is also served by a number of undeveloped recreation areas in more remote parts of the planning area. These sites provide lake access and support dispersed recreational use as well as other uses such as wildlife management. However, all of these areas have limited and/or basic facilities, and therefore offer little support of current or future levels of visitor activities. These recreation areas are encompassed within the management areas listed in Section 2.1.2.

2.2.3 Recreation Facilities The recreation areas at New Melones Lake provide a wide range of recreation- related facilities. This section describes these facilities in more detail. A comprehensive matrix showing recreation facilities by recreation area is presented in Table 2-1.

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Glory Hole Recreation Area Glory Angels Angels Angels Hole Tower Carson Buck Black Osprey Creek Creek Fish Point New Melones Iron Horse Big Oak Climb Creek Brush Bart Day Point Day Swim Boat Cleaning Boat Facilities Metric Lake Marina Campgrounds Campground Trailhead Trailhead Day Use Use Use Area Ramp Station Ramp

Access and Parking: Chapter 2 Paved Parking Spots # 97 10 24 0 0 20Overview of44 New Melones39 Lake 0 196 118 126 Unpaved Parking Spots P=P#aved / 20 0 0 13 14 0 0 0 48 0 0 460 Table 2-1A. Recreation Facilities at New Melones Lake Access Roads U=Unpaved P+U P P P P P P P U P P P Launch Ramp Boat Lanes # 0 0 0 0 0 0 0 0 0 6 0 7 Courtesy Docks # 0 0 0 0 0 0 0 0 0 2 0 3

Day Use Facilities: Picnic Sites w/ grills # 0 0 0 0 0 0 19 20 9 11 0 0 Picnic Sites w/o grills # 0 0 0 1 1 0 0 0 0 0 0 0 ADA Picnic Area Yes / No No No No No No No No No No No No No

Overnight Facilities: Standard Sites # 0 67 53 0 0 0 0 0 0 0 0 0 Walk-in Sites # 0 20 0 0 0 0 0 0 0 0 0 0 Group Sites # 0 0 0 0 0 0 0 0 0 0 0 0 ADA Campsites # 0 4 1 0 0 0 0 0 0 0 0 0 Camp Host Sites # 0 2 2 0 0 0 0 0 0 0 0 0

Trails: Number and length of trails # (Miles) 6 trails (11.6 miles)

Support Facilties: Restrooms w/ flush toilets # 1 4 3 0 0 1 1 1 0 Nearby 1 0 Restrooms w/ showers # 0 3 2 0 0 0 0 0 0 0 0 0 Portable Toilets # 0 0 0 0 0 0 0 0 0 0 0 1 CXT Vault Restrooms # 0 0 0 1 1 0 0 0 0 0 0 1 Potable Water Yes / No Yes Yes Yes Yes No Yes Yes Yes No Yes Yes No Dump Station Yes / No No No No Nearby No No No No No No No No Fish Cleaning Station Yes / No No No No No No No No No No No Yes No Pay Phone Yes / No Yes No No No Yes No No No No No No No Floating Lake Restrooms # Four (4) floating restrooms on the lake

Miscellaneous: Equestrian Stagi* ngSource: Area Reclamation, 2007aYes (Resource / No InventoryNo Report) No No No No No No No No No No No * Shading indicates that these parking spaces are only used during lower lake levels Playground Yes / No No No No No No No No No No No No No Boat Rentals Yes / No Yes No No No No No No No No No No No 2-9 FINAL – April 2011 Boat Mooring Facilities Yes / No Yes No No No No No No No No No No No Store Yes / No Yes No No No No No No No No No No No Amphitheater Yes / No No Yes No No No No No No No No No No New Melones Lake Commercial Services Study & Financial Feasibility Evaluation

Table 2-1B. Recreation Facilities at New Melones Lake

Tuttletown Recreation Area

Oak Knoll Heron Eagle Point Acorn Manzanita Chamise Fiddleneck Group Lupine Day Point Day Group Tuttletown Facilities Metric Campground Campground Campground Group Camp Camp Use Area Use Picnic Area Boat Ramp

Access and Parking: Paved Parking Spots # 12 2 6 0 10 44 40 96 141 Unpaved Parking Spots # 0 4 0 12 0 0 0 0 350 Access Roads P=Paved / U=Unpaved P P+U P+U P P PPP P+U Launch Ramp Boat Lanes # 0 0 0 0 0 0 0 0 7 Courtesy Docks # 0 0 0 0 0 0 0 0 3

Day Use Facilities: Picnic Sites w/ grills # 0 0 0 0 0 14 18 10 0 Picnic Sites w/o grills # 0 0 0 0 0 1 0 0 0 ADA Picnic Area Yes / No No No No No No No No Yes No

Overnight Facilities: Standard Sites # 68 40 8 0 0 0 0 0 0 Walk-in Sites # 0 15 28 0 0 0 0 0 0 Group Sites # 0 0 0 6 10 0 0 0 0 ADA Campsites # 1 1 0 0 0 0 0 0 0 Camp Host Sites # 1 2 0 0 0 0 0 0 0

Trails: Number and length of trails # (Miles) 7 trails (6.3 miles)

Support Facilties: Restrooms w/ flush toilets # 1 2 2 Nearby 0 1 1 Nearby 1 Restrooms w/ showers # 1 1 1 0 0 0 0 0 0 Portable Toilets # 0 0 0 0 0 0 0 0 0 CXT Vault Restrooms # 1 0 0 0 1 0 0 0 0 Potable Water Yes / No Yes Yes Yes Yes Yes Yes Yes No Yes Dump Station Yes / No No No No Nearby No No No No No Fish Cleaning Station Yes / No No No No No No Yes No No No Pay Phone Yes / No No No No No No Yes No No No Floating Lake Restrooms #

Miscellaneous: Equestrian Staging Area Yes / No No No No No No No No No No Playground Yes / No No No No No No No No No No Boat Rentals Yes / No No No No No No No No No No Boat Mooring Facilities Yes / No No No No No No No No No No Store Yes / No No No No No No No No No No Amphitheater Yes / No No No No No No No No No No * Source: Reclamation, 2007a (Resource Inventory Report) * Shading indicates that these parking spaces are only used during lower lake levels

2-10 FINAL – April 2011 Chapter 2 Overview of New Melones Lake

Table 2-1C. Recreation Facilities at New Melones Lake

HQ Undeveloped Areas Old Town New Melones Mark of Chaparal Bear French Natural Parrots Camp Total Facilities Metric Administration Twain Melones Basin Peoria Creek Flat Bridges Ferry Nine (All Areas)

Access and Parking: Paved Parking Spots # 31 0 10 0 0 0 0 30 0 0 1,096 Unpaved Parking Spots # 0 60 8 10 36 4 0 0 20 90 1,149 Access Roads P=Paved / U=Unpaved P P P UP+UU U P P P -- Launch Ramp Boat Lanes # 0 0 0 0 0 0 0 0 0 0 20 Courtesy Docks # 0 0 0 0 0 0 0 0 0 0 8

Day Use Facilities: Picnic Sites w/ grills # 1 0 0 0 0 0 0 0 0 0 102 Picnic Sites w/o grills # 2 0 0 0 0 0 0 4 0 0 9 ADA Picnic Area Yes / No No No No No No No No No No No --

Overnight Facilities: Standard Sites # 0 0 0 0 0 0 0 0 0 0 236 Walk-in Sites # 0 0 0 0 0 0 0 0 0 0 63 Group Sites # 0 0 0 0 0 0 0 0 0 0 16 ADA Campsites # 0 0 0 0 0 0 0 0 0 0 7 Camp Host Sites # 0 0 0 0 0 0 0 0 0 0 7

Trails: Number and length of trails # (Miles) 1 trail (0.5 miles) 5 trails (11.9 miles)

Support Facilties: Restrooms w/ flush toilets # 1 0 0 0 0 0 0 0 0 0 21 Restrooms w/ showers # 0 0 0 0 0 0 0 0 0 0 8 Portable Toilets # 0 1 0 0 0 0 0 0 0 0 2 CXT Vault Restrooms # 0 0 0 1 0 0 0 1 0 1 8 Potable Water Yes / No Yes No No No Yes No No No No No -- Dump Station Yes / No No No No No No No No No No No -- Fish Cleaning Station Yes / No No No No No No No No No No No -- Pay Phone Yes / No Yes No No No No No No No No No -- Floating Lake Restrooms #

Miscellaneous: Equestrian Staging Area Yes / No No No No No Yes No No No No No -- Playground Yes / No No No No No No No No No No No -- Boat Rentals Yes / No No No No No No No No No No No -- Boat Mooring Facilities Yes / No No No No No No No No No No No -- Store Yes / No No No No No No No No No No No -- Amphitheater Yes / No No No No No No No No No No No -- * Source: Reclamation, 2007a (Resource Inventory Report) * Shading indicates that these parking spaces are only used during lower lake levels

2-11 FINAL – April 2011

Chapter 2 Overview of New Melones Lake

Campgrounds Reclamation manages five developed campgrounds at New Melones Lake, two at the Glory Hole Recreation Area, and three at Tuttletown Recreation Area. The five campgrounds collectively have 327 camping sites,18 available for use during the primary recreation season. Camping is permitted only in the designated campgrounds; no shoreline camping is allowed. Amenities at each camping site include a picnic table, fire pit, and grill; each campground has water spigots, restroom facilities, and hot showers. In addition, there are two group campgrounds located at Tuttletown with a combined 16 campsites.

Campground reservations are available through the National Recreation Reservation Service, or are otherwise available on a first-come first-served basis. Each campground also has its own self-registration/self-pay station. The fee for overnight camping for a standard campsite is $18 per night and $14 per night for the walk-in campsites. Fees at the group campgrounds range from $100 to $120 per night.

Boat Access Facilities Both the Glory Hole and Tuttletown Recreation Areas have boat launch ramps with courtesy docks. At Glory Hole, two boat ramps are provided: Angels Creek Boat Ramp, with six boat ramp lanes and two courtesy docks; and Glory Hole Point Boat Ramp, with seven boat ramp lanes and three docks. Tuttletown has only one boat launch facility, with seven boat ramp lanes and three docks. All of the boat launch facilities are served by paved and/or unpaved parking and other nearby support facilities, such as restrooms.

Day-Use Facilities Day-use facilities at New Melones Lake provide a total of 119 picnic sites, primarily at the Glory Hole and Tuttletown Recreation Areas. Limited picnic facilities are also provided at the Mark Twain Recreation Area and at Natural Bridges. Of the total picnic sites, 108 sites include grills. An Americans with Disabilities Act (ADA) -accessible group picnic site is also available, located at the Eagle Point Group Picnic Area. Many of the day-use areas provide trailhead access to the developed trail system around the lake.

Trails New Melones Lake has an extensive trail system for visitors participating in hiking, biking, and wildlife viewing activities. The trail system consists of 19 trails covering approximately 30.3 miles. The majority of trails have been developed within the Glory Hole Recreation Area. Specifically, there are six trails at Glory Hole: Angels Creek Trail (2.5 miles/moderate difficulty); Buck Brush Loop (1.3 miles/easy); Carson Creek Trail (2.3 miles/moderate difficulty); Frontier Trail (2.0 miles/moderate difficulty); Gold Rush Trail (2.2 miles/moderate difficulty); and Tower Climb (1.3 miles/challenging).

18 Includes seven ADA-accessible campsites and seven camp host sites

2-13 FINAL – April 2011 New Melones Lake Commercial Services Plan & Financial Feasibility Evaluation

Historically, the trail system at the Tuttletown Recreation Area was limited. However, a complementary system of trails in the Tuttletown Recreation Area has recently been developed. The trails at Tuttletown include: Black Bear Loop Trail (1.2 miles/easy); Point Trail (0.4 miles/easy); Fox Ravine Trail (0.4 miles/easy); Heron Point Trail (1.7 miles/easy); Kingsnake Loop Trail (0.8 miles/easy); Redtail Trail (1.2 miles/easy); and Ringneck Run Trail (0.6 miles/easy).

One trail is available at the New Melones Visitor Center – the Norwegian Gulch Trail (0.5 miles/easy). There are five other trails at undeveloped recreation areas, including Natural Bridges Trail (0.7 miles/moderate difficulty); Green Springs Trail (2.0 miles/moderate difficulty); Peoria Mountain Trail (4.0 miles/challenging); Peoria Ridge Trail (3.7 miles/moderate difficulty); and Table Mountain Trail (1.5 miles/challenging). Some of the outlying areas may also have informal trails.

Equestrian Staging Area The Peoria WMA provides an equestrian staging area, which facilitates horseback riding and other equestrian activities around the lake. The staging area includes space for trailer parking, tie areas, and water. It has been available for overnight group use by special use permit.

Access Roads and Parking Formal parking areas are provided at all developed recreation areas, while informal parking is common at many of the undeveloped areas. Some of the developed parking areas are inundated when the water level in the lake is high, limiting parking space at the boat launches and day use areas. During peak visitor periods, parking at the marina and overflow parking for campers is also limited.

Dam Overlook The Dam Overlook is on the western side of the lake in Tuolumne County, and is accessed via Peoria Flat Road from Highway 108/120 (Reclamation 1995). This area contains viewing shelters, a restroom, and a parking lot, and was developed for public viewing during dam and facility construction. The facility is currently closed to the public.

Support Facilities A number of support facilities are also provided at the developed and undeveloped recreation area at New Melones Lake, including:  Amphitheater (at Iron Horse Campground)  RV dump stations  Fish cleaning stations  Restrooms (including floating restrooms on the lake)

2-14 FINAL – April 2011 Chapter 2 Overview of New Melones Lake

 Showers (coin-operated)  Potable water systems  Pay phones

In addition, the New Melones Lake Marina at the Glory Hole Recreation Area provides boat mooring and other commercial services to visitors; see Section 2.4 for more information.

2.3 Recreation Use and Visitation

The recreation resources at New Melones Lake draw a substantial number of visitors to the lake every year. Recent data indicate that annual visitation to the lake has ranged between approximately 660,000 and 790,000 over the past 5 years. Additional information on recreation visitation and occupancy rates, as it relates to measures of recreation demand, is presented in Section 3.2.1.

According to on-site survey information,19 many visitors reside in the surrounding counties of Tuolumne and Calaveras, which together account for 29.1 percent of total visitation to the lake. The Lake also draws substantial numbers of visitors from the Bay Area, with Alameda, Contra Costa, and Santa Clara counties collectively comprising 25.9 percent of total visitation. The Lake is also a popular recreation destination for residents from the , with Sacramento, San Joaquin, and Stanislaus counties accounting for 25.1 percent of total visitation. The remaining 20 percent of visitors come from other parts of the State.

2.4 Commercial Services and Concessions

Commercial services can be provided at Reclamation facilities to support and enhance recreational activities, programs, and facilities, and to provide a means for disseminating public use information.20 Currently, commercial services at New Melones Lake are limited to a single marina concessionaire and other commercial activities undertaken pursuant to special use permits.

2.4.1 New Melones Lake Marina The primary commercial service already operating at New Melones Lake is the New Melones Lake Marina located in the Glory Hole Recreation Area. The marina operates under a concession agreement, specifying services to be provided, between the concessionaire and Reclamation.

19 U.S. Bureau of Reclamation, 2008c 20 All concessionaire contracts include explicit measures related to the notice and dissemination of public information, communications equipment necessary in the event of emergencies, medical emergency provisions, and spill emergency response measures (Reclamation 2009a).

2-15 FINAL – April 2011 New Melones Lake Commercial Services Plan & Financial Feasibility Evaluation

Marina Facilities and Services The marina offers boat slips and mooring for rent, which accommodate both small and large watercraft, including houseboats. The marina maintains a total of 100 small boat slips (20-24 feet), of which 56 are covered and 44 are uncovered. The marina slips are rented on an annual term and are fully occupied (with a waiting list). The marina also offers houseboat rentals and other motorized watercraft rentals (i.e., patio boats, ski boats, fishing boats, and personal watercraft). The marina has a convenience store that sells fishing and camping supplies, food and beverages, and other miscellaneous items. The marina also has a boat fueling station, sewage pump-out service, propane sales, and baggage cart service. The marina does not offer prepared food service. The current concessions agreement is set to expire in 2012.

Marina Rates The rates charged by the marina for all goods and services provided must be approved by Reclamation on an annual basis. Reclamation approves rates based on a market review of recreation services provided at comparable facilities in the region. A summary of the current rates approved for the New Melones Lake Marina is presented in Table 2-2 and Table 2-3. The marina has the discretion to charge less than the approved rates in response to market conditions.

Houseboating Houseboating is an integral component of overall marina operations. The marina is authorized to have a total of 106 houseboats at its facility, including 18 rental houseboats, 38 private houseboats docked in marina slips, and 50 private houseboats docked at mooring balls in the cove. The marina operator has the discretion to accommodate fewer houseboats, including houseboat rentals, based on market conditions. For example, the marina has recently reduced its fleet of rental houseboats to 13 based on existing demand. Currently, three unique houseboat models are offered for rent: Escapade, Odyssey, and Eclipse. Rental rates vary by boat and by season. Approved weekly rates during the winter months (off-season) range from $2,965 to $4,515 per boat, whereas peak summer rates are between $5,014 and $7,509 per week. Although the demand for houseboat rentals fluctuate from year to year and season to season, there remains a strong demand for houseboat mooring, which is illustrated by a multi-year waiting list that is maintained by the concessionaire.21

21 Personal communication with Mike Han, General Manager, Water Resorts, Inc. on December 8, 2009

2-16 FINAL – April 2011 Chapter 2 Overview of New Melones Lake

Table 2-2. New Melones Lake Marina Approved Rates (2009) Item / Service Rate ($) Fishing Boats Daily $75 Hourly $19 Patio Boats Daily $250 Hourly $63 Bluewater Ski Boats, 19' Daily $395 Hourly $70 Malibu Wakesetter, 21' Daily $525 Hourly $105 Waverunners Daily $425 Hourly $75 Berthing: Day $26 Week $117 Monthly 20' Open -- 20' Covered $293 24' Open $248 24' Covered $335 Mooring Ball $281 48' x 15' Slip, QTR $1,379 Annual 20' Open -- 20' Covered $2,208 24' Open $1,802 24' Covered $2,490 Mooring Ball $2,307 48' x 15' Slip $4,341 Dock Service ($/hr) $64 Mechanic ($/hr) $95 Pumpout Service (under 35') $0.11 / gallon Pumpout Service (over 35') $0.11 / gallon Electricity to Slips Charge cost Source: U.S. Bureau of Reclamation, 2009b, Approved Rate letter and spreadsheet, dated December 5, 2008

2-17 FINAL – April 2011 New Melones Lake Commercial Services Plan & Financial Feasibility Evaluation

Table 2-3. New Melones Lake Marina Approved Rates (2009) – Houseboat Rentals

Houseboat Weekend Mid-Week Weekly

Escapade Spring $3,256 $3,431 $5,731 Summer $4,041 $4,272 $7,509 Winter $2,559 $2,698 $4,515

Odyssey Spring $2,774 $2,917 $4,725 Summer $3,514 $3,717 $6,155 Winter $2,233 $2,345 $3,912

Eclipse Spring $2,258 $2,363 $3,850 Summer $2,861 $2,993 $5,014 Winter $1,761 $1,845 $2,965 Source: U.S. Bureau of Reclamation, 2009b, Approved Rates (letter and spreadsheet), dated December 5, 2008

Marina-Related Planning Issues The 2003 visitor capacity study for New Melones Lake identified a number of planning issues that are important for the marina and other potential commercial services:  Inadequate parking, loading zones, and accessible facilities  Need for diversity of boat rentals and pricing options  (Appropriate) number and size of houseboat rentals  Footprint of the marina exceeding contract agreement  Long-term exclusive use of private houseboat moorings

The visitor capacity study further suggests that the “reasonable” number of houseboats (not including those moored at the marina) that should be on the water at any one time is between 50 and 60. It also suggests that fewer than 10 percent of the private houseboats leave the marina at one time, thereby indicating an upper limit on houseboats on the lake. Reclamation has determined that that the current size of the marina reflects an optimal capacity for watercraft, including houseboats, based on management considerations and visitor experience. A use limit on houseboats would limit potential commercial opportunities at a marina related to additional houseboat mooring and/or number of rentals.

2-18 FINAL – April 2011 Chapter 2 Overview of New Melones Lake

2.4.2 Other Commercial Services Other types of commercial services are found at New Melones Lake, but are subject to special use permits or license agreements rather than concessions contracts. For example, when water conditions are appropriate, commercial rafting companies offer guided raft trips on the Stanislaus River (in the Camp Nine area), with difficulty levels ranging from low to moderate. In addition, fishing guides from the area commonly bring their clientele to New Melones Lake, and commercial outfitters sometimes offer guided gold panning expeditions in the planning area. Furthermore, a seaplane school has also operated on the lake in the past. Although the focus of this study will be on commercial services that would be provided in accordance with concessions agreements, other commercial services are also considered.

2-19 FINAL – April 2011

Chapter 3 Regional Recreation Facilities and Commercial Services

Chapter 3 Regional Recreation Facilities and Commercial Services

Recreational use at any location depends on many factors, including the locations and types of activities at alternative sites. Chapter 3 provides an overview of the regional recreation environment considering the supply of and demand for commercial services opportunities. The demand analysis also considers regional recreation trends as well as the demographic characteristics of the visitor base at New Melones Lake.

3.1 Supply of Recreation Resources

This subsection considers three measures of recreation supply. The first is recreation and commercial service opportunities at other water-based facilities proximate to New Melones Lake. The second considers other California facilities similar in size and character to New Melones Lake. The third reflects local recreation-serving businesses near New Melones Lake.

3.1.1 Water-Based Recreation Facilities near New Melones Lake New Melones Lake is one of many lakes and in the region. Some of these nearby facilities provide commercial services which should be considered in planning for commercial services at New Melones Lake. For this analysis, all lakes and reservoirs within an approximate 30-mile radius were considered (Figure 3-1).22 Each is described below and is included in Table 3-1.  Amador Lake is a small reservoir located near the communities of Ione and Buena Vista, approximately 30 miles north of New Melones Lake. It was developed by the Jackson Valley Irrigation District, but recreation management at the reservoir is provided by the Lake Amador Resort. The resort provides marina services including a boat launch area, docks, storage, fishing boat rentals and non-motorized boat rentals. Although the resort is open to motor-boating, no waterskiing or jet-skis are allowed, and there is no houseboating. The resort also provides developed camping at 150 sites and RV camping at 73 sites with full hookups. Other amenities include a general store, restaurant, club house, swimming pond, and waterslides. Lake Amador is well known for its recreational fisheries.

22 The selection of a 30-mile radius is consistent with previous recreation analyses (see State of California, Department of Water Resources, Comparative Inventory of Recreation Facilities at California's Largest Reservoirs, 2000, published December 2001.) Several additional facilities are included in the analysis that are just outside the 30-mile threshold, but should be considered in the regional supply of recreation resources in the region.

3-1 FINAL – April 2011 PLACER 193 50 COUNTY 89

EL DORADO COUNTY

30-mile buffer of ALPINE AMADOR New Melones Lake COUNTY COUNTY 88 SACRAMENTO CALAVERAS COUNTY COUNTY

16

Amador Lake 104

Beardsley Lake Camanche Reservoir Pardee Reservoir

Pincecrest Lake MA 31:01:01 @ 0102/6/8 - dxm.ROBc_eR_desab-retaW_1-3giFs_enoleMweNs\paM\EFF-PSC_senoleM_weNs\ctejorP\atadsig\c2me120S\\ - 0102/6/8 @ 31:01:01 MA

12 88 New Hogan Reservoir

Lyons Reservoir Salt Spring Valley Reservoir

New Melones Lake SAN JOAQUIN Cherry Lake COUNTY

Farmington Lake Tulloch Reservoir Pine Mountain Lake

Woodward Reservoir Don Pedro Reservoir

120 120

Lake McClure Modesto Reservoir

STANISLAUS COUNTY Turlock Lake nnamuaR.C - AC dnaklaO - proC SRU proC - dnaklaO AC - nnamuaR.C

33 MARIPOSA COUNTY MERCED 49 5 COUNTY 165

Water-Based Recreation Facilities in Proximity to New Melones Lake

New Melones Lake Area, California Central California Area Office

0 5 10 MILES Figure 3-1 Chapter 3 Regional Recreation Facilities and Commercial Services

Table 3-1. Summary of Recreation and Commercial Facilities at Waterbodies within Approximately 30 Miles of New Melones Lake

General Recreation Facilities Commercial Services RV Non- Distance Boat Camping Motorized Motorized Rec. Equestrian from New Melones Surface Miles of Launch Camp- Camp- (Full Houseboat Boat Boat Equipment Food Riding Other Waterbody (Miles) Acres Shoreline Areas grounds sites Hookups) Marina Rentals Rentals Rentals Rentals Service Store Stables Lodging New Melones Lake -- 12,500 100 3 5 305 NO YES (1) YES YES NO NO NO YES NO NO Amador Lake 30.0 400 14 1 4 150 YES YES (1) NO YES YES NO YES YES NO NO Beardsley Reservoir 28.6 N/A N/A 1 1 16 NO NO NO NO NO NO NO NO NO NO Cherry Lake 31.8 N/A N/A 1 1 45 NO NO NO NO NO NO NO NO NO NO Don Pedro Lake 20.0 13,000 160 3 1 172 YES YES (2) YES YES YES YES YES YES NO NO Farmington Lake 23.5 N/A N/A NO NO NO NO NO NO NO NO NO NO NO NO NO Lake Camanche 28.8 7,700 53 2 15 762 YES YES (2) NO YES YES NO YES YES NO YES Lake McClure 21.7 7,000 82 4 4 600 YES YES (2) YES YES YES YES YES YES NO NO Lake McSwain 29.6 N/A N/A 2 4 98 YES YES (1) NO YES YES NO YES YES NO NO Lyons Reservoir 19.5 N/A N/A NO NO NO NO NO NO NO NO NO NO NO NO NO Modesto Reservoir 20.2 2,800 31 2 N/A 150 YES YES (1) NO YES YES YES YES YES NO NO New Hogan Lake 18.2 4,400 50 2 5 N/A NO NO NO NO NO NO NO NO NO NO Pardee Lake 23.3 2,000 37 1 1 100 YES YES (1) NO YES NO NO YES YES NO NO Pinecrest Lake 32.2 300 4 1 2 300 NO YES (1) NO YES YES YES YES YES NO NO Pine Mountain Lake 20.0 202 6 1 1 23 YES YES (1) NO NO YES NO YES YES YES NO Salt Spring Valley Res. 13.0 N/A N/A 1 1 24 YES NO NO NO NO NO NO YES NO NO Tulloch Lake 8.0 N/A 55 2 1 130 YES YES (1) NO YES YES YES YES YES NO YES Turlock Lake 22.0 3,500 26 1 1 66 NO NO NO NO NO NO NO NO NO NO Woodward Reservoir 21.5 2,900 23 3 5 154 YES YES (1) NO YES YES YES YES YES NO NO

N/A: Information not available

3-3 FINAL – April 2011

Chapter 3 Regional Recreation Facilities and Commercial Services

 Beardsley Reservoir is one of three reservoirs operated as part of the Tri-Dam Project (along with Donnells Lake and Tulloch Lake), which is jointly managed by the Oakdale Irrigation District and the South San Joaquin Irrigation District. It is approximately 29 miles east of New Melones Lake. Beardsley Reservoir has developed recreation facilities, such as campgrounds and day-use areas, with amenities including stoves, table, and flush toilets. It also provides opportunities for boating (including a boat launch), fishing, swimming, and hiking and wildlife viewing along a system of nature trails. No commercial services are available at Beardsley Reservoir.  Cherry Lake is in the Stanislaus National Forest just over 30 miles east of New Melones Lake, and is managed by the United States Forest Service (USFS). The lake has a single boat launch. Other recreation facilities include a developed campground with 45 campsites, vault restrooms, sandy swimming beaches that are only accessible by boat, as well as hiking trails. There is neither a marina nor any other commercial services at Cherry Lake.  Don Pedro Reservoir is approximately 20 miles south of New Melones Lake, along the . It is the fifth largest reservoir in California with approximately 160 miles of shoreline (at maximum capacity). Don Pedro Reservoir provides abundant recreation opportunities that are managed by the Don Pedro Recreation Agency23 and which are supported by commercial businesses at the lake operated by a marina concessionaire.24 Camping opportunities include tent camping, group camping, RV camping, and boat-in camping, which are complemented by day-use and picnic areas, as well as a swimming lagoon. Fishing is allowed year-round on the Reservoir and some hunting access is provided (subject to private property permission and BLM regulations/access). Don Pedro Reservoir is served by two full- service marinas, Lake Don Pedro Marina and Moccasin Point Marina. Both offer houseboat rentals (ranging from 50 to 70 feet); rentals of ski boats, patio boats, fishing boats and personal watercraft; recreation equipment rentals; boat slip rental (daily/monthly); boat repair shop; dry storage; and convenience store that sells recreation supplies (e.g. bait and tackle). In addition, Lake Don Pedro Marina has a café restaurant, while Moccasin Point Marina provides snack bar service.  Farmington Reservoir is part of the Farmington Flood Control basin operated by USACE, and is approximately 24 miles from New Melones Lake. There are no developed recreation facilities or commercial services at the Reservoir.

23 The Don Pedro Recreation Agency, which is responsible for the recreation element of the Don Pedro Project, is sponsored by the Turlock Irrigation District, the Modesto Irrigation District, and the City and County of San Francisco. 24 Forever Resorts (www.foreverhouseboats.com)

3-5 FINAL – April 2011 New Melones Lake Commercial Services Plan & Financial Feasibility Evaluation

 Lake Camanche, about 29 miles from New Melones Lake, covers 7,700 surface acres and has 53 miles of shoreline. The Lake is administered by the East Bay Municipal Utility District (EBMUD), but all recreation and supporting commercial services are provided by a concessionaire.25 Camping is available at 15 campgrounds providing 762 campsites, including full hookups in RV park areas, as well as campsites with yurt structures. Alternative options for overnight accommodations include cottages, motel rooms, and a mobile home park. Lake Camanche has two boat launch areas on the northern and southern shores of the lake, each with a full-service marina. The marinas offer on-water fueling, berthing, storage, and rental boats. In addition, each marina contains a general store that sells general recreation supplies. Food service is provided by a coffee shop (North Shore) and snack bar (South Shore). Other commercial services include laundry facilities and lake tours.  Lake McClure is approximately 22 miles south of New Melones Lake and is operated by the Merced Irrigation District. The lake covers 7,000 surface acres and has over 80 miles of shoreline. Recreation facilities include four developed campgrounds containing 600 campsites, RV hookups, swimming lagoons, restrooms with flush toilettes, and showers. The lake has four developed recreation areas (McClure Point, Barrett Cove, Horseshoe Bend, and Bagby), all of which are served by boat launching facilities. There are two marina facilities at the lake, one at McClure Pont and the other at Barrett Cove. Both marinas provide houseboat mooring and fishing and patio boat rentals, and at Barrett Cove Marina, houseboat rentals are also available. A concessions store and groceries are available at all recreation areas other than Bagby.  Lake McSwain is just south of Lake McClure, approximately 30 miles from New Melones Lake and is also operated by Merced Irrigation District. It is smaller than Lake McClure and caters to powerboats, canoes, kayaks, inflatables, and small sailboats. Waterskiing, jet skiing, wakeboarding, and houseboats are not permitted. Lake McSwain has four campground loops with a total of 98 campsites, along with RV hookups, restrooms with flush toilettes and showers, a swim beach, and children’s playground. The single developed recreation area at the lake includes a boat launch and full-service marina with fishing and patio boat rentals. While the lake has no houseboat rentals or mooring, a concessions store and snack bar are open for business there.  Lyons Reservoir is a Pacific Gas & Electric (PG&E) facility about 20 miles east of New Melones Lake. There are no commercial services available, and the only formal recreation facility at the Reservoir is a parking area that includes a toilet, trash containers, one picnic table,

25 Camanche Recreation Company (www.camancherecreation.com)

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and drinking water. Informal recreation opportunities are provided primarily during the recreation season (May 1 through October 31), including angling, hiking, picnicking, horseback riding, and bicycling. Dispersed camping also occurs in the northern portion of the planning unit, as well as on adjacent USFS lands. No boating or body contact recreation is permitted. Whitewater rafting opportunities are available just north of Lyons Reservoir on the South Fork Stanislaus River.  Modesto Reservoir and Regional Park, about 20 miles south of New Melones Lake, covers 3,240 acres of land and 2,800 acres of surface water. The area provides general recreation opportunities such as camping, swimming, fishing, boating, water/jet skiing, bird watching, waterfowl hunting (with permit during specific times of year), archery, and radio-controlled airplane flying. Modesto Reservoir offers approximately 150 full hook-up campsites, undeveloped camping areas, picnic shelters/tables, archery range, and a radio control glider airplane field. Modesto Reservoir and Regional Park is managed by the Stanislaus County Parks and Recreation, which uses a concessionaire to provide marina services, including a coffee shop, grocery store, boat and ski rentals, and fuel.  New Hogan Lake is a USACE facility about 18 miles northwest of New Melones Lake. New Hogan Lake supports standard water-based recreation opportunities, such as boating, waterskiing, fishing, canoeing, sailing, cruising, and swimming. Nine designated recreation areas surround the lake, which provide opportunities for camping (at five campgrounds); day use and picnicking; hiking, biking, and equestrian trail use; ranger programs; hunting; and disc golf. While there are two boat launch areas, there is neither a marina nor other commercial services at the lake.  Pardee Lake is approximately 24 miles northwest of New Melones Lake near the community of Ione. The lake covers 2,000 surface acres and has 37 miles of shoreline. EBMUD oversees the operation and maintenance of facilities, but recreation management is under the direction of Pardee Lake Recreation, Inc., a concessionaire under long- term contract with EBMUD.26 Overnight facilities at Pardee Lake include one developed campground with 100 campsites, as well as an RV Park with full hookups. Other recreation facilities include day-use areas, two swimming pools, restrooms with flush toilets and showers, laundry facilities, and a playground. Although body contact recreation (such as swimming and waterskiing) is prohibited at the lake, boating is popular and is supported by one boat launch area and full-service marina. The marina provides mooring and slips; boat rentals; boat, trailer and RV storage; and a convenience store that sells general

26 Pardee Lake Recreation (www.pardeelakerecreation.com)

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recreation supplies. In addition, a café restaurant at the lake provides prepared food service.  Pinecrest Lake is in Tuolumne County, in the Stanislaus National Forest, just over 30 miles northeast of New Melones Lake. The 300- acre lake is owned and operated by PG&E as part of its Spring Gap- Stanislaus Hydroelectric Project. The USFS manages the recreation opportunities at the lake. The most common recreation activities are camping, fishing, hiking, and general trail use, swimming, and boating (personal watercraft are not allowed). Recreation facilities include campgrounds (with 300 campsites, tables, grills, and flush toilets), day use areas with swim beach, and boat launch area with marina. The marina is operated by concessionaire Pinecrest Lake Resorts and is open seasonally (April – October). It provides motorboat, paddleboat, sailboat, party-boat, and kayak rentals, as well as short-term slips and temporary mooring. The marina also sells general recreational supplies and groceries.  Pine Mountain Lake is a relatively small private lake serving local residents and visitors in the town of Groveland, approximately 20 miles southeast of New Melones Lake. The lake and surrounding facilities support numerous recreational activities, including boating, swimming, fishing, camping, horseback riding, tennis, and golf. The lake is served by a marina that offers small boat rentals, food service (grill), and water taxi service. The campground provides 23 campsites, which include 10 sites with RV hookups. Other facilities at the lake include country club, lodge (available for rental), full-service equestrian stable, swimming pool, golf course, and tennis courts.  Salt Springs Valley Reservoir is a privately owned lake approximately 13 miles northwest of New Melones Lake in Calaveras County near the town of Copperopolis. The Reservoir features a jet-ski course and fishing, which are accommodated by a developed boat launch area with transient berths. No ski boats are allowed. Overnight and group camping is available at the campground (with 24 campsites) and at the RV Park, which is open year round. There are also day-use areas with picnic sites, boat wash-down areas, swimming areas, and fish cleaning stations, as well as restrooms and showers. A convenience store provides relevant items such as bait and tackle and ice. No marina or recreation rentals are available at the Reservoir.  Tulloch Lake is operated as part of the Tri-Dam Project, jointly managed by the Oakdale Irrigation District and the South San Joaquin Irrigation District. The Lake is approximately 8 miles southwest of New Melones Lake, near the community of Jamestown. Tulloch Lake has over 55 miles of shoreline and is a highly developed recreation destination, subject to overcrowding during the peak recreation season, indicating a strong demand for recreational opportunities in the local

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area. Recreation access is from privately-owned docks and through privately-owned facilities accessible by the public on a fee basis. Commercial services are extensive. The South Lake Tulloch RV Campground and Marina provides opportunities for overnight camping and RV camping (130 campsites with full hookups), as well as lakefront cabin rentals. The marina facility provides boat slips, boat rentals, fuel, a general store, laundromat, and restrooms and showers. A hotel resort offers waterfront accommodations and a wide range of vacation amenities.  Turlock Lake State Recreation Area (SRA), managed by the California Department of Parks and Recreation (DPR), is about 22 miles south of New Melones Lake. This area is open year-round and provides opportunities for camping, picnicking, fishing, swimming, boating, and water skiing. The recreation area features 26 miles of shoreline with developed day-use areas, campgrounds, and a boat launch. However, no commercial services are available.  Woodward Reservoir and Regional Park is approximately 22 miles west of New Melones Lake, near the town of Oakdale, and is managed by the Stanislaus County DPR. The park consists of 3,767 acres of land and 2,900 acres of surface water, which are available for recreation, including swimming, fishing, boating, water/jet skiing, waterfowl hunting (with permit), and radio-controlled airplane flying. Facilities include 115 developed campsites, 40 full hook-up RV campsites, undeveloped camping areas, and day-use facilities (e.g., picnic shelter, barbeques, picnic tables). The park also contains marina facilities and concession services, such as a coffee shop, grocery store, boat and ski rentals, and fuel.

3.1.2 Comparable Water-Based Recreation Facilities Statewide To fully understand the supply of commercial services that may be provided at New Melones Lake, it is also important to account for facilities and services provided at comparable lakes and reservoirs throughout Northern California. The discussion below focuses on larger, water-based facilities that share some of the attributes found at New Melones Lake, including size, primary recreation activities, types of use, and relatively low elevation (Figure 3-2). (although at a much higher elevation) and the Sacramento-San Joaquin Delta (although not a lake or reservoir) were also included because they are both prominent water-based recreation opportunities in Northern California.

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Trinity Lake

HUMBOLDT SHASTA LASSEN TRINITY

Lake Almanor

TEHAMA PLUMAS

Lake Oroville BUTTE SIERRA NEVADA GLENN

MENDOCINO NEVADA YUBA Lake Tahoe COLUSA PLACER Clear Lake SUTTER LAKE

EL DORADO YOLO ALPINE SONOMA NAPA SOLANO SACRAMENTO AMADOR Sacramento-San Joaquin Delta CALAVERAS

MARIN New Melones Lake

SAN JOAQUIN TUOLUMNE MONO CONTRA COSTA

SAN FRANCISCO

ALAMEDA MARIPOSA STANISLAUS

SAN MATEO

MADERA SANTA CLARA MERCED SANTA CRUZ

FRESNO Pine Flat Reservoir PA CI F I C INYO SAN BENITO OCEAN

TULARE

MONTEREY KINGS \\S021emc2\gisdata\Projects\New_Melones_CSP-FFE\Maps\NewMelones_Fig3-2_Other_Major_Water_BOR.mxd - 12/18/2009 @ 9:43:22 AM Lake San Antonio Nacimiento Reservoir Isabella Lake

SAN BERNARDINO SAN LUIS OBISPO KERN URS Corp - Oakland CA - C.Raumann Other Major Water Bodies in California

New Melones Lake Area, California Central California Area Office

025 50 MILES Figure 3-2 Chapter 3 Regional Recreation Facilities and Commercial Services

 Clear Lake, in Lake County, is the largest, natural freshwater lake in California with nearly 44,000 surface acres and 100 miles of shoreline at full capacity. The lake is surrounded by private and public lands, both of which provide substantial opportunities for public recreation, such as camping, boating, and fishing. This mix of lands also supports a wide range of commercial services for visitors. Numerous boat launch areas and full-service marinas provide boat slips and mooring. Some are associated with private commercial resorts, and others are on public lands such as county parks and state park lands. Overnight camping, including several RV parks, is available at the lake. Other commercial services provided near Clear Lake include hotel/motel lodging and destination resorts, recreation equipment rentals, and convenience stores.  Folsom Lake is in Sacramento County and covers 11,400 surface acres at capacity. Folsom Lake is operated by Reclamation, but California State Parks manages the recreation facilities as part of the Folsom Lake SRA. The SRA provides opportunities for general recreation, such as camping at two developed campgrounds (providing 150 campsites and RV hookups), swim beaches, trail use, and day-use areas. Boating access is provided at five boat launch areas and is supported by a full- service marina at Brown’s Ravine. Numerous commercial services are provided and are managed under concessions agreements with California State Parks.  Isabella Lake is a popular recreation destination east of Bakersfield in Kern County. The surface area of the lake is 11,400 acres and the venue offers about 38 miles of shoreline. It is surrounded by private and public lands providing numerous access points to the lake. There are eight developed campgrounds offering 800 campsites and RV hookups, managed by a private concessionaire to the USFS. The lake also has four boat launch areas and is served by three marinas. Other commercial services around the lake include convenience stores, restaurants, and other lodging.  Lake Almanor covers 28,500 surface acres in Plumas County and has approximately 52 miles of shoreline. It is owned and operated by PG&E as part of its North Fork facilities. PG&E and the USFS maintain several boat launch areas and campgrounds for public use. However, many of the recreation opportunities at the lake are tied to commercial facilities that are operated by private businesses under agreement with PG&E. These include 22 separate resorts which provide a range of commercial services, including lodging. Among them, five full-service marinas provide additional amenities, such as boat and equipment rentals.

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 Lake Berryessa, a Reclamation facility in Solano County, covers about 21,000 surface acres and has 165 miles of shoreline. Lake Berryessa offers several free day-use areas and one free boat ramp. The seven developed recreation areas at the lake are operated by concessionaires. These commercial resorts provide opportunities for camping, other lodging (e.g., cabin rentals and RV Park), boat launching, and full- service marinas with houseboat, powerboat, personal watercraft, and other equipment rentals. Reclamation has recently prepared a Visitors Service Plan that will guide the future operation of Lake Berryessa.  Lake Nacimiento and Lake San Antonio comprise the Lake Nacimiento Recreation Area, which is operated by the Monterey County Water Resources Agency. Together, these lakes cover approximately 11,100 surface acres and have 225 miles of shoreline. Because the lands surrounding the lakes are primarily privately owned, there are relatively few public recreation areas. Recreational opportunities are provided primarily by two commercial resorts (one at each lake) which offer marina facilities, including boat launching and mooring, boat rentals (houseboats at Lake San Antonio), and dry storage. In addition, these resorts offer camping, overnight lodging (including RV camping and cabins), restaurants, and convenience stores.  Lake Tahoe is a large, natural lake in California and Nevada that serves as a very popular recreation destination. Both public and private lands surround the lake, providing substantial opportunities for recreation and supporting a wide range of commercial services, including resorts and casinos. Facilities at the lake include numerous boat launch areas and full-service marinas. Camping is available at 18 public and private campgrounds, and other overnight lodging options, such as RV Parks and hotels/motels, are available. Day use is accommodated at public/private beaches, which contain snack bars/restaurants and convenience stores.  Millerton Lake, east of Fresno, covers approximately 4,900 surface acres and has 47 miles of shoreline. It is a popular recreation area for residents. It is a Reclamation facility, but recreation opportunities are managed by California State Parks as part of the Millerton Lake SRA. Camping is available at two campgrounds with 173 sites, including RV hookups. The Lake is served by three boat launch areas and one full-service marina. The marina is a concessionaire to California State Parks, and provides mooring, boat rentals, dry storage, and a snack bar.  Oroville Lake in Butte County is the second largest reservoir in California, covering approximately 21,000 surface acres with 165 miles of shoreline. Recreation opportunities at the lake are provided by California State Parks as part of the SRA, including

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seven campgrounds with 312 sites; RV camping; and hiking, biking, and equestrian trails. The Lake is served by four developed and five undeveloped boat launch areas. It also has two full-service marinas, operate by concessionaires under agreement with California State Parks. The marinas offer boat mooring, boat and personal watercraft rentals (including houseboats), snack bar/restaurants, and convenience stores selling groceries and other recreation goods.  Pine Flat Lake, east of Fresno, covers nearly 6,000 acres and has approximately 67 miles of shoreline. The Lake is operated by the USACE, which also manages most of the recreation facilities there. Several campgrounds provide camping and RV use. The lake is served by four boat launch areas, as well as two marinas. Pine Flat Lake Marina offers boat mooring and slips, boat rentals (including houseboats), camping, and a store. Trimmer Marina offers mooring only. Pine Flat Lake Resort is on the lake and provides camping (including RV sites), a general store, and an outdoor café.  San Luis Reservoir in Merced County covers 13,800 surface acres and has 65 miles of shoreline. It has two boat launch areas and no marina. Camping is available at four campgrounds offering 132 campsites and RV dump services. Other facilities include hiking, biking, and equestrian trails, showers, restaurant, convenience stores, and coin laundry.  Shasta Lake in Shasta County is the largest reservoir in California, covering 29,500 surface acres with 370 miles of shoreline. It is owned and operated by Reclamation, but the USFS manages many of the recreation facilities as part of the Whiskeytown-Shasta-Trinity . In addition to abundant opportunities for camping (including RV use), numerous overnight lodging options, such as cabins and hotels/motels, are available. Shasta Lake is a popular boating destination with many boat launch facilities, marinas, and resorts. The 11 marinas at the lake provide mooring capacity for approximately 2,500 boats, and many of these are full-service facilities, offering boat and equipment rentals, including houseboat rentals. Standard marina services are typically complemented by convenience stores and gift shops.  The Sacramento-San Joaquin Delta provides water-based recreation opportunities, particularly boating and fishing through a large expanse between the Bay Area and the Central Valley. There are numerous boat launch facilities and marinas throughout the Delta. In addition to mooring services, some marinas offer boat rentals, restaurants/snack bars, accommodations and convenience stores.  covers 17,000 surface acres with 145 miles of shoreline in Trinity County. In a manner similar to Shasta Lake, Trinity Lake is a Reclamation facility for which USFS is responsible for management of

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most recreation facilities. Such facilities include seven boat launch areas and five marinas, some of which provide boat rentals, including houseboats. In addition, a number of commercial resorts provide overnight lodging and recreation support services.

3.1.3 Summary and Comparison of Facilities with New Melones Lake New Melones Lake is similar to many large California reservoirs due to its size, location in the foothills, availability of opportunities for motorized boating and warm-water fishing, and, because of favorable weather, its suitability for a relatively long boating season. Developed day use areas and camping facilities are also similar to those at other large reservoirs in California. At full pool, New Melones Lake is larger than many reservoirs in Northern California, although a few other lower elevation reservoirs, such as Lake Shasta and Lake Oroville, are larger. Like other large reservoirs, New Melones Lake has a marina, although other reservoirs have multiple marinas. However, the Lake, offers fewer food options and other services compared to many of the other facilities within 30 miles. On the whole, New Melones Lake is less commercially developed than other comparable-sized reservoirs.

New Melones Lake is similar to many reservoirs in California with regards to water level characteristics. Water levels fluctuate substantially throughout the year because of seasonal water deliveries (especially during the summer), provision for flood control, and natural and wet cycles. The fluctuations can create changing physical conditions, which does provide challenges for maintaining access to a reservoir’s facilities.

New Melones Lake differs from higher elevation lakes and reservoirs in other characteristics. At New Melones Lake, water is warmer and generally more conducive for activities such as waterskiing or wakeboarding. Moreover, the climate at New Melones Lake allows for participation in these types of summer activities both earlier in the spring and later into the fall. Higher elevation facilities typically have more cabins and summer residences because of the cooler summers at those elevations. Some of the higher elevation lakes and reservoirs may be more desirable for cold water fishing and non-motorized activities, as conflicts between motor boaters and personal water craft is less likely.

New Melones Lake is somewhat unique among lower elevation reservoirs in offering to recreationists semi-primitive flat water recreational opportunities (as classified by the WROS in the RMP/EIS). Few larger reservoirs offer this type of secluded recreation activity. The semi-primitive zone also provides whitewater boating opportunities at low water levels.

New Melones Lake is one of the largest reservoirs close to the San Francisco Bay Area, and residents of Alameda, Contra Costa, and Santa Clara Counties account for a substantial proportion of visitors to the area. While the San

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Francisco Bay Area has many reservoirs, most are relatively small and do not allow motorized use.

In summary, New Melones Lake is very similar to many large reservoirs in California at similar elevations in the foothills. Further, many of the boating, fishing, and developed camping recreation opportunities at the lake are similar to other venues. The level of commercial development is generally less at New Melones Lake than at the other large facilities. However, New Melones Lake is relatively unique among larger reservoirs in its proximity to the San Francisco Bay Area. Geographically, only Lake Berryessa has comparable or better access to the Bay Area market.

3.1.4 Private Recreation-Oriented Businesses in Local Area In addition to other water-based recreation areas, it is also important to consider the supply of private local businesses that serve recreational visitors to New Melones Lake. The communities surrounding New Melones Lake are small tourist-based locales that draw many visitors to the region irrespective of the lake with their unique shops, galleries, and museums. These communities include Angels Camp, Sonora, Columbia, Jamestown, and Copperopolis within close proximity to the lake, as well as the more distant communities of San Andreas, Twain Harte, and Murphys. Visitors to these areas are attracted to local shopping and dining in the historic “” region, as well as other recreation opportunities available in the region; the most prominent attraction in the general area is .

Many of the towns, including Sonora and Angels Camp, have grown considerably in recent years and now provide full-service commercial shopping areas that serve local residents and visitors alike. Some local businesses also cater directly to visitors coming to recreate at New Melones Lake. This section reviews some of the private businesses in the area to help understand the extent to which potential commercial services at New Melones Lake are already provided locally/regionally.

From the perspective of general recreation services, there is one business that primarily serves visitors to New Melones Lake – Glory Hole Sports. Glory Hole Sports is along Highway 49 in Angels Camp at the turnoff to the Glory Hole Recreation Area. The commercial focus of Glory Hole Sports is on the sale of fishing and other recreation equipment and supplies, including fishing rods and reels, bait, and tackle. It also sells groceries allowing visitors to the lake to purchase snack foods, beverages, and ice en route to the lake. A full-service deli at the store provides another food option to visitors. There is also a gas station at Glory Hole Sports.

Other options are available for purchasing groceries, fuel, and general recreation supplies in Angels Camp and Sonora. There are several full-service grocery stores where food and beverages can be purchased. Prepared food can be obtained from a number of local dining establishments and fast-food

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restaurants. Other gas stations along Highway 49 provide convenience store merchandise, in addition to fuel service. Local retailers in the area, including large chain stores, provide an alternative location to purchase recreation equipment and suppliers.

There are a number of local businesses in the communities around the lake that focus on specific types of recreation activities, including activities occurring at New Melones Lake. Private recreation businesses in the area include:  Fishing guides, including those that offer guided fishing trips at New Melones Lake  Equestrian stables, including outfits that provide organized trail rides, pack trips, and riding rentals  Cave exploration outfits that provide opportunities for spelunking in the variety of natural limestone and crystalline-filled caverns open to the public (e.g., Moaning Cavern and Mercer Caverns)  Gold panning expeditions catering to families, schools, and organized groups  Adventure outfitters that provide a wide range of recreation rentals, as well as recreation gear for sale  Whitewater rafting operators that provide single and multi-day guided raft trips, including trips on the Stanislaus River.27 Currently, commercial operators offer whitewater trips both above and below New Melones Lake on the Stanislaus River.  Boat storage facilities that provide local boat owners opportunities for dry boat storage  Hotels/motels that provide overnight accommodations for visitors to the area  RV parks that cater to visitors with RVs that require full electrical hookups and sewage disposal services

3.2 Demand for Recreation Resources

This section includes a discussion of the demand for recreational resources. It begins with a review of existing recreation demand at New Melones Lake (Section 3.2.1), followed by a review of regional recreation demand (Section 3.2.2). Section 3.2.3 describes trends important to recreation use at New Melones Lake. Other factors influencing recreation demand are discussed in Section 3.2.4. Much of the existing information about recreation demand is

27 A special use permit is required from Reclamation for commercial whitewater trips in the New Melones Planning Area

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focused on park or natural area visitation and not necessarily on commercial services. However, it is expected that increases in recreation visitation will lead to greater demands for associated commercial services.

3.2.1 Measures of Existing Recreation Demand at New Melones Lake This section summarizes existing recreation demand at New Melones Lake. Visitation is briefly discussed, followed by a discussion of visitor capacity and occupancy. Results of two recreation surveys important to the availability of commercial services are then discussed.

Visitation at New Melones Lake Visitor use provides one indicator of recreation demand in the study area. Over the past 5 years, New Melones Lake has attracted an average of approximately 713,000 visitors annually, with visitation peaking in 2006 at nearly 800,000 visitors (see Table 3-2).28 Visitation varies annually in response to a number of factors, most notably water levels and economic conditions. Most recreation use at the lake is at the Glory Hole Recreation Area and Tuttletown Recreation Area, which collectively account for 80 percent of visitation to the lake. The other recreation areas jointly account for the remaining 20 percent. Visitation is seasonal and is highest during the peak recreation season (May through September), which accounts for 62 percent total annual visitation (see Table 3-3).

Table 3-2. Recreation Visitation at New Melones Lake (2004-2008) Recreation Area Year Glory Hole Tuttletown Other Total 2004 320,111 215,394 164,483 699,988 2005 303,891 232,132 145,219 681,242 2006 368,030 296,502 127,759 792,291 2007 313,755 285,703 131,586 731,044 2008 292,990 230,199 138,292 661,481 Average 319,755 251,986 141,468 713,209 Source: U.S Bureau of Reclamation, 2009c (visitation estimates based on traffic counts)

28 U.S. Bureau of Reclamation, 2009c (based on visitation data compiled by Reclamation using traffic counters for the years 2004-2008)

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Table 3-3. Average Recreation Visitation by Month at New Melones Lake (2004-2008)

Month Average Annual Visitation % of Total Annual Visitation January 30,225 4.2% February 34,696 4.9% March 50,902 7.1% April 55,631 7.8% May 85,252 12.0% June 87,507 12.3% July 113,310 15.9% August 85,294 12.0% September 67,309 9.4% October 40,461 5.7% November 32,896 4.6% December 29,727 4.2% Total 713,209 100.0%

Source: U.S Bureau of Reclamation, 2009c (visitation estimates based on traffic counts)

Facility Capacity and Occupancy Occupancy rates indicate whether recreation visitation above specific levels can be accommodated without the addition of new facilities, or whether the current facilities are underutilized. Average campground occupancy rates at New Melones Lake were between 24 percent and 26 percent of maximum occupancy since 2007. However, as annual averages, these figures do not indicate whether current facilities are adequate during peak-use periods such as summer or holiday weekends. Table 3-4 provides estimates of recreation occupancy at New Melones Lake by facility type and by season. Occupancy during the summer is the highest, with facilities (campgrounds, parking lots) reaching full capacity (100 percent) on some summer weekends. Weekday use drops off substantially during the summer while fall and spring occupancy is moderate during the weekends and very low during the weekdays. Winter recreation occupancy is generally very low. Occupancy at picnic sites is very low throughout the year.

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Table 3-4. Estimated Weekend and Weekday Recreation Facility Occupancy Rates at New Melones Lake by Season Summer Fall/Spring Winter Weeken Weekda Weeken Weekda Weeken Weekda Recreation Facility d y d y d y 70- Campgrounds 100% 10-20% 20-40% 5-10% 5-10% 2% Picnic Sites 10% 1% - - - - Group Overnight 70- Sites 100% 10-20% 20-40% - 1% - Parking Lots 70- (Boat Launches) 100% 20-30% 20-40% 5-10% 5-10% 2% Source: U.S. Bureau of Reclamation, 2009d (estimates provided by field staff that have knowledge of recreation use at New Melones Lake)

When New Melones Lake is at full pool, some parking facilities are inundated and subsequently inaccessible. Consequently, the lake may be at or near full capacity on some summer weekends or holidays. Nonetheless, it appears that additional recreation use could be accommodated at New Melones Lake (aside from some summer weekends) without the construction of new recreational facilities.

The data in Table 3-4 also have important implications for the feasibility of other potential commercial enterprises at New Melones Lake. The viability of any business that requires large initial capital investments depends on continued use within and between years to spread the fixed costs associated with those investments. Fixed costs by definition are invariant with the level of activity of a business and include such categories as interest, taxes, depreciation, and amortization. The seasonality of use at New Melones Lake, particularly low off- season demand, limits the long-run viability of some types of potential commercial enterprises.

Houseboat Occupancy Specific to houseboats, demand indicators include houseboat occupancy rates for rentals and waiting lists maintained by the marina operator for private houseboat slips and moorings. Occupancy rates for rental houseboats vary by type of boat and season. As expected, occupancy is highest during the peak recreation season, with August generally being the highest month for houseboat rentals. Based on information collected from the marina operator, since 2000, houseboat rental occupancy peaked in 2007, with occupancy averaging about 85 percent during the month of August. The data shows that during certain periods occupancy rates have approached 100 percent for select boats. More recently, rental houseboat occupancy has declined significantly primarily due to economic conditions.

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Demand Indicators from Recreation Use Surveys In the summer of 2007, Reclamation contractors conducted an on-site survey of users at New Melones Lake regarding their frequency of visitation, area of residence, and participation in various recreational activities at the lake. A subsequent telephone survey in the New Melones Lake primary market area was conducted to obtain information about recreation visitation patterns, attitudes towards New Melones Lake, and perceived barriers to participating in outdoor recreation at the lake. The telephone survey targeted not only current lake visitors, but also non-visitor residents of the counties within the primary New Melones Lake market area. The non-visitors surveyed provided valuable information about reasons for not visiting.

The on-site survey revealed that visitors average 13 visits per year to New Melones Lake, although the median number of visits is 6. The disparity between mean and median values indicates that a relatively small proportion of visitors account for a substantially-larger proportion of total visitation to the lake. Nearly one-quarter (23.1%) of the visitors stated they visited the area more than 16 times. The majority of the respondents (59.1%) to the on-site survey said that their typical visit was a day trip. Many of the most frequent visitors at New Melones Lake reside relatively close to the facility.

On-site respondents provided data on the activities in which they participated while visiting New Melones Lake. The following activities were cited by at least 20 percent of the respondents:  Swimming (59.0%)  Motor boating (57.2%)  Shoreline or boat fishing (41.9%)  Waterskiing or wakeboarding (41.7%)  Camping (37.4%)  Beach activities (35.0%)  Using personal watercraft (32.3%)  Using open space areas (31.8%)  Wildlife viewing, bird watching, or viewing natural scenery (30.7%)  Driving for pleasure, sightseeing, driving through natural scenery (22.6%)  Picnicking in developed sites (20.6%)

The majority of the activities are water dependent. It is likely that camping and picnicking are water-enhanced activities, as people participate in those activities because of proximity to the lake. Further, some individuals who are camping

3-20 FINAL – April 2011 Chapter 3 Regional Recreation Facilities and Commercial Services also participate in various water-based activities while visiting New Melones Lake.

On-site respondents were asked to rate the activities available at New Melones Lake that were most important to their experience while in the area. Respondents were asked to rate their top five activities, although many did not provide more than two. The following were either the most popular or second most popular activity selected by at least 20 percent of the respondents:  Motor boating (49.3%)  Shoreline or boat fishing (28.2%)  Waterskiing or wakeboarding (28.2%)  Swimming (22.6%)

The reservoir and the recreation opportunities it provides are major draw cards for visitors to the local region. Many of these opportunities are not necessarily provided by commercial providers, but could be enhanced by commercial services. For example, an activity such as motor boating could either be provided by a commercial service (e.g., marina) or enhanced by providing fuel or equipment rentals. Overall, it is clear that commercial services at New Melones Lake should be focused on water-based or water-enhanced activities.

On-site respondents were also asked to rate outdoor recreation activities that they would enjoy if they were available at New Melones Lake. Responses varied widely. Many indicated a desire for opportunities already at the lake, indicating a need for interpretation and educational efforts rather than commercial opportunities. For example, a respondent stating that they wish they could participate in fishing suggests an opportunity for introductory instruction because clearly fishing is available at New Melones Lake.

More broadly, the following activities were cited by at least 10 percent of the respondents as the most or second most important activity in which they would have participated were it available:  Shoreline or boat fishing (17.3%)  Horseback riding and events (12.6%)  Motor boating (10.3%)  Camping (10.3%)

All four of these activities currently are allowed at New Melones Lake. It is possible that some individuals indicating a desire to camp, an activity currently available at the lake, may have been unable to participate in that activity because the campgrounds were full. Additionally, while horseback riding is currently allowed in the area, few visitors may own horses, which indicates an opportunity for a concession which provides equestrian-related services.

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Telephone survey respondents who had visited New Melones Lake in the last 5 years were asked about possible barriers to participating in outdoor recreation in the study area. Responses were provided on a 5-point scale from strongly disagree (1) through strongly agree (5); a neutral response was a mean of 3.0. The results with the highest agreement scores were “needs more day-use facilities” (mean: 3.54), “needs more campgrounds with hook-ups and hot showers” (mean: 3.53), and “more camping or overnight use facilities are needed” (mean: 3.26). Some of these services would typically not be provided by a commercial operator but by the recreation provider. However, a private RV-park could provide overnight facilities as well as hook-ups and hot showers.

The telephone survey included a statement to which respondents were asked to comment: “Needs more private business services.” The response across respondents averaged 2.54, suggesting slight disagreement with the statement. However, 21.3 percent of the respondents agreed with the statement and 3.2 percent strongly agreed, suggesting some visitors would come to the lake if additional commercial services were provided. The factor with the lowest rating was “it is too far from where I live to New Melones Lake” (mean: 1.74); only 7.1 percent of the respondents agreed or strongly agreed with this statement. This suggests distance traveled is not a significant barrier to visitation for many in the six counties (Tuolumne, Stanislaus, Santa Clara, Calaveras, Contra Costa, and San Joaquin) where the phone survey was conducted.

On-site survey and telephone respondents were asked to rate the quality of New Melones Lake facilities and services on a five-point scale from very satisfied (1) to very dissatisfied (5). The responses to one factor, “quality of marina,” are particularly important relative to commercial services. On-site survey respondents rated the quality of marina with a mean of 1.93, indicating overall satisfaction. About five percent of the respondents stated they were dissatisfied or very dissatisfied. Twenty-one percent of the respondents had “no opinion,” indicating, not surprisingly, that some visitors’ experiences at New Melones Lake are independent of the marina services. The scores of telephone respondents relative to the marina averaged 1.94, virtually identical to those of on-site respondents. However, 11.3 percent of the telephone survey respondents did say that they were dissatisfied. This may suggest some past visitors may be choosing other boating locations because of dissatisfaction with the marina at New Melones Lake.

3.2.2 Regional Recreation Demand This section provides a review of information related to regional recreation demand. Insight on the regional demand for recreation can be garnered in the extensive amount of recreation opportunities available near New Melones Lake as outlined in Section 3.1. In addition, indicators of recreation demand are also available at the state level. The information presented here is from the California Outdoor Recreation Plan (CORP), prepared by California Department of Parks and Recreation (State Parks) in 2009. The CORP is a

3-22 FINAL – April 2011 Chapter 3 Regional Recreation Facilities and Commercial Services planning document reflecting current statewide trends and their effects on outdoor recreation participation and opportunities, and is required for state eligibility for certain federal grants. Most of the document is related to the public provision of outdoor recreation. However, the results also provide some indication of demand for commercial services operated in conjunction with public lands.

The CORP includes the results of a comprehensive statewide survey completed in 2007 and 2008, which provides general information about California residents and their attitudes and views about recreation-related issues. Over 2,700 respondents participated in a phone survey, and more than 1,200 participated in a mail or online survey. The survey effort was completed to provide a “comprehensive view of the outdoor recreation patterns and preferences of Californians.” The report subdivided California into seven regions. The discussion here focuses on three regions that contribute the majority of visitors to New Melones Lake: the Sierra, the Central Valley, and the Bay Area regions.

Respondents were asked if they spend “more,” “about the same,” or “less” time on outdoor recreation activities compared to 5 years ago. An equal number of people from the Sierra and Central Valley regions stated “more” and “less” time, while a greater percentage of respondents (39.3 percent) in the Bay Area stated they are spending “more” time in the outdoors than “less” time (29.7 percent). These responses suggest that there has been a slight increase in demand for outdoor recreation activities. Respondents were also asked if certain factors would limit their level of physical activity in the parks; one factor was commercial services. The majority of respondents in all three regions stated that commercial services do not limit their activity (“not at all”), although between 2.5 percent and 6.1 percent of the respondents stated that it does “a lot.” This indicates that a small proportion of people in the market area may be more inclined to visit if there are commercial services.

Survey respondents were asked to rate the importance of various recreational facilities and services, from 1 (not at all important) to 5 (very important). Some of the items were applicable to commercial services. The results, rounded to the nearest integer, included the following:  RV campgrounds with electrical and water hookups (Sierra region: 4; other two regions: 3)  Sheltered lodging facilities such as rustic cabins, yurts, and tent cabins (Sierra region: 4; other two regions: 3)  Commercial visitor services within public parks and outdoor recreation areas such as hotels, motels, restaurants and shops (All three regions: 3).  Launch ramps, marinas and other facilities (Sierra region: 4; other two regions: 3)

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The results suggest at least modest support for various potential commercial services from some respondents and stronger support from others.

3.2.3 Trends in Recreation Use

Population Population growth is the key factor accounting for trends in recreation use. A 2005 State Parks planning document notes: 29 “changes in the size and composition of California’s population, more than anything else, will drive the impacts on the delivery of park and recreation services in the coming years.” California’s increasing population of about 500,000 people annually will be the primary factor influencing future recreation use. Two other demographic factors (decreasing participation rates among young adults and youth and varying participation rates based on ethnicity or race) and their potential effect on commercial services are also important factors accounting for recreation use trends. Additional information on recreation trends was obtained from the 2009 California Outdoor Recreation Plan prepared by California State Parks.

The population in the primary market area served by New Melones Lake is expected to increase substantially in the future, which could result in increased demand for commercial services at the lake. Population projections for the New Melones Lake market area are presented in Table 3-5. These projections extend through 2040 and were estimated by using county population projections from the California Department of Finance and information on respondent’s county of origin from the New Melones Lake on-site visitor survey. To develop a single set of population projections, county-level data for primary market area counties were aggregated and weighted based on the relative proportion visitation from each county. The population of the primary market area is expected to increase (relative to 2009 population levels) by 15.3 percent by 2020, 31.2 percent by 2030 and 47.9 percent by 2040; this equates to an annual population increase of about 1.2 percent over the approximate 30-year projection period.

29 California State Parks. 2005. Parks and Recreation Trends

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Table 3-5. Population Projections in the Primary Market Area Serving New Melones Lake

Population Projection Proportion County of Visitors 2009 2020 2030 2040 Tuolumne 20.1% 56,335 64,161 67,510 70,325 Santa Clara 11.5% 1,857,621 1,992,805 2,192,501 2,412,411 Stanislaus 10.1% 526,383 699,144 857,893 1,014,365 San Joaquin 9.1% 689,480 965,094 1,205,198 1,477,473 Calaveras 8.8% 45,987 56,318 64,572 72,230 Contra Costa 8.8% 1,060,435 1,237,544 1,422,840 1,609,257 Sacramento 5.9% 1,433,187 1,622,306 1,803,872 1,989,221 Alameda 5.4% 1,556,657 1,663,481 1,791,721 1,923,505 Total (Weighted) -- 761,521 878,177 998,791 1,126,146 Percent Change (from 2009) -- -- 15.3% 31.2% 47.9%

Source: California Department of Finance, 2007

Decrease in Participation among Youth and Young Adults There are strong indications that youth and younger adults are not recreating at the same levels as previous generations did. This is especially true for “traditional” activities such as fishing and hunting. Given the popularity of fishing at New Melones Lake, the implication is that any increase in fishing activity will lag the rate of population growth. For example, participation rates have dropped among young adults from 34 percent in 2002 to 21 percent in 2007. Therefore, the increase in population is partially offset by a decrease in the proportion of Californians who participate in fishing.

Differing Participation Rates among Ethnic and Racial Groups Another important factor relating to recreation use is lower recreation participation among minority ethnic and racial groups than among whites (Manning 1999). Because the population of non-whites is expected to increase at a greater rate than whites in California, recreation use may not increase as rapidly as population growth, other factors equal.

Activity Participation Cordell et al. (1999) provided the most comprehensive recent regional projections for several important recreation activities. Projections were made through 2050 and were based, in part, on projected population changes. The country was divided into five regions. New Melones Lake and the primary Lake market area are in the Pacific Coast region. The following are participation rate projections from 2010 to 2050 for important recreational activities for that region:  Motor boating (increase 54%)

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 Non-pool swimming (increase 45%)  Rafting / floating (increase 64%)  Fishing (increase 23%)  Horseback riding (increase 50%)  Developed camping (increase 45%)  Picnicking (increase 36%)

Most activities were projected to increase through 2050. Fishing was anticipated to increase more modestly in spite of a substantial increase in population in the Pacific Coast region. The authors acknowledge the impact that unexpected changes in the national and regional economy will have on projected recreation use. The projections thus provide general guidelines on the direction of recreation use, but are not a substitute for on-site monitoring of recreation use. Cordell (2008) followed up the 1999 report by tracking nature-based outdoor recreation participation at a national level from 2000 through 2007. Data suggest a modest 3.1 percent increase in the numbers of people who participated in nature-based outdoor recreation. However, the number of activity-days increased more substantially, indicating that people are spending more time on individual trips or that some visitors are participating very frequently. This is the case at New Melones Lake, as the on-site recreation survey indicated about one-quarter of the respondents had visited more than 16 times in the past 12 months.

There are indications that recreation use (especially traditional activities such as fishing) may not be increasing at the level Cordell and others projected in 1999. The California Department of Fish and Game (2009) reports the number of sport fishing licenses sold by year from 2000-2008. Over that period, the total number of sport fishing licenses sold in California decreased from about 3.1 million to about 2.9 million despite the growth in population over that same period.

3.2.4 Other Factors Influencing Recreation Demand

Reservoir Water Levels As a multi-purpose facility, management of water supplies at New Melones Lake results in fluctuations in water levels in the reservoir. Water levels vary seasonally because of reservoir drawdown and also vary annually due to wet and dry weather cycles. One of the primary effects of water level fluctuation is the impact upon recreation, which can result in changes in visitation levels and corresponding demand for commercial services. New Melones Lake may be more desirable for some visitors at full pool as there is more boatable area and the lake appears more attractive. However, some parking facilities are inaccessible at higher levels, thereby limited accessibility and use. Low water levels decrease boatable areas (although there could be an increase the

3-26 FINAL – April 2011 Chapter 3 Regional Recreation Facilities and Commercial Services availability of whitewater recreation) and may make the lake less desirable for some potential visitors. In addition, Haas (2003) suggests that the amount of islands and coves and inlets available for house boaters to obtain privacy increases at low water levels. In any case, commercial services fully reliant on either high or low water levels may be compromised with substantial fluctuations in water levels. This is particularly important at New Melones Lake, for which current operating rules and agreements are undergoing review and may result in greater drawdown of the reservoir at certain times of the year. To provide perspective, Figure 3-3 shows changes in water surface elevation at New Melones Lake since 1990. Between 1990 and 2009, water levels have fluctuated between 721 feet and 1,084 feet, and have only approached full pool fewer than half of the years. In addition, recent rulings and decisions from court cases and the US Fish and Wildlife Service may result in a long term trend of lower average water levels.

Source: California Data Exchange Center, 2010

Figure 3-3. Water Elevations at New Melones Lake (1990-2009)

Fuel Prices Fuel prices have increased for several years because of the increasing worldwide demand, a weakening US dollar, and, likely, other factors. Cordell (2008) suggests continuing high fuel prices would likely increase recreation demand at natural areas proximate to urban areas while reducing demand at more distant locations. New Melones Lake is close to urban areas in both the

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Bay Area and Central Valley. Therefore, it is not certain that increasing fuel prices will result in a subsequent decrease in recreation visitation. However, a significant increase in fuel prices could have an effect on fuel-intensive recreation activities (such as motor boating) as the cost of both travel and participation increases.

3.2.5 Conclusions Regarding Recreation Demand Overall, it is anticipated that recreation use at New Melones Lake will increase over time, but likely less than the rate of population growth due to recent trends that indicate a decline in recreation participation, as well as other demographic and economic factors. A key confounding factor is the possibility that people that recreate at New Melones Lake will do so more frequently as indicated by national trends. As a result, it is difficult to predict the rate of change in recreation use; therefore, the estimated population growth rate (1.2 percent in the regions where visitors reside) is considered an upper bound on forecasted recreation use at the lake.

The anticipated increase in recreation use suggests that occupant capacity could continue to be reached on summer weekends. However, this is not expected to be an issue during other times of the year.

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Chapter 4 Review of Commercial Service Opportunities

In Chapter 4, a range of potential commercial service opportunities at New Melones Lake are assessed in accordance with key evaluation criteria relevant to the commercial service planning process (Section 4.1). Potential commercial opportunities considered in this study were identified based on information from the RMP and/or are commercial services frequently provided at other Reclamation facilities. Commercial services are analyzed individually; however, multiple services may be combined to enhance their viability. Many of the potential commercial services addressed in Section 4.2 are consistent with Reclamation goals and objectives; however, the analysis also addresses other potential commercial services that have been identified in the RMP process, but which are explicitly prohibited under the preferred alternative in the RMP.

The siting of commercial services under consideration is addressed generally in this chapter in Section 4.3. A more detailed discussion of resource-based opportunities and constraints and engineering considerations is presented in Chapter 5. The financial feasibility evaluation for select commercial services is presented in Chapter 7.

4.1 Criteria for Evaluation

Three general criteria were used to assess the various potential commercial service opportunities at New Melones Lake. These criteria address whether an adequate market exists (i.e., supply and demand) for each commercial service, as well as the overall appropriateness of the commercial service at the lake. More detail on these criteria is presented below.  Demand30  Is the commercial service necessary to meet existing and potential future recreational demand?  Do population and recreation trends suggest that there will be a future demand for the commercial service?  Supply  Is demand met on or off of the federal estate? (Opportunities both on and off the federal estate may meet existing demand.)  Would the provision of the commercial service at New Melones Lake be unique? (For example, food services are available in

30 For this CSS, demand was assessed qualitatively using a range of indicators, including population growth and trends in activity participation.

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Sonora and Angels Camp, but food service on the lake would provide a different experience).  Does the supply of comparable commercial services take into account local opportunities, while accounting for the utility of the reservoir?  Appropriateness of Facilities and Services  Is the commercial service consistent with Reclamation’s goals and policies?  Is the commercial service consistent with the New Melones Lake RMP/EIS (preferred alternative)?  Is the commercial service best provided as a public service and not as a commercial service? (Demand may exist for some services, which have been traditionally provided as a public service, e.g. campgrounds, picnic areas, and boat ramps, while others, including marinas, have been traditionally provided by commercial operators).

4.2 Commercial Service Opportunities Subject to Evaluation

The following includes a discussion of the various potential commercial activities and an assessment of their viability and appropriateness at New Melones Lake. Each section includes a note regarding the recommendation for whether the service considered should be included in the financial feasibility evaluation. As indicated above, some of these services may not be viable on their own and may need to be combined with other activities into an integrated operation.

4.2.1 Marina Services: Berths and Moorings Generally, the demand for motor boats and related marina services is likely to continue into the future.31 Marina berths and moorings provide boat owners with storage facilities on the water, allowing them to easily access their craft without loading and unloading them. This ease of access is especially important for operators of large boats, including houseboats. Many large lakes and reservoirs in California that experience high boating activity generally provide opportunities for berth and/or mooring rentals on both a short- and long-term basis.

At New Melones Lake, current demand for marina berths and moorings exceeds available supply at existing marina facilities as demonstrated by the multi-year waiting list that is maintained for long-term berth rentals accommodating both

31 Cordell 1999

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small watercraft and larger houseboats.32 The waiting lists indicate that boat owners would readily rent additional berths if they were available.

Currently, the marina does not provide transient slip rentals, and there is currently no efficient way to store boats for transient or short-term visitors to the marina. There appears to be an unmet demand for these services, as boat owners would likely prefer to store their boat on the water during their stay rather than to pull the boat off the water every day. Haas (2003) suggested that providing transient slips would also alleviate congestion on the boat ramps by reducing the number of times visitors load and unload their boat, particularly on summer weekends.

Although it is evident that marina operations could expand based on existing demand, the capacity of the lake and related resource considerations must be considered. In the 2003 visitor capacity study, Haas concluded that one marina was adequate to serve visitors at the New Melones Lake. A single marina would offer consolidated services and may minimize resource impacts. An additional marina could potentially be supported if the number of slips and mooring opportunities is expanded. The decision to expand the capacity of marina facilities should be made in conjunction with new information on the carrying capacity of the lake.

There has been consideration of an additional marina facility offering less intensive recreation opportunities, such as kayak and canoe rentals, thereby serving a different type of recreation user. Because such a facility would likely need to be located in a less-developed part of the lake, it could create an inconsistency with WROS guidelines. Further, such a facility may not have a large enough customer base to be economically viable; many non-motorized boaters may prefer to visit lakes and reservoirs that are higher in elevation, and more than likely, at a location that does not allow or limits motorized craft. As a result, a single consolidated marina that caters to a diverse range of recreational users and activities is proposed.

There are several key issues related to marina facilities that need to be addressed to better provide short- and long-term berthing at the lake and enhance overall marina operations: (1) location of the marina(s); (2) boundary issues; (3) and concerns regarding exclusive use. Because of the current location of the marina, boats and existing facilities are susceptible to damage from prevailing storm winds from the southwest, which build energy before lapping waves up against marina facilities. In fact, there have been several large storms in recent history that have caused substantial damages to the marina and boats. As a result, it is recommended that the marina be relocated to a more suitable location, but it should be retained in one of the existing developed recreation areas – Glory Hole or Tuttletown. Based on a planning-level analysis, potentially suitable locations include the Black Bart Day-Use Area (at Glory

32 Personal communication with Mike Han, 2009

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Hole) or the Heron Point Day-Use Area (at Tuttletown). However, it is recommended that a more in-depth analysis of marina location be conducted to identify optimal locations for marina facilities. Additional studies need to take into account site-specific characteristics, such climatic conditions (e.g., wind patterns), water level fluctuations, and natural and cultural resources.

As for marina boundaries, it is acknowledged that water level fluctuations can cause the existing marina to extend outside its fixed boundary. It is recommended that any new concession contract allow flexibility in the marina boundary by allowing the boundary to adjust to different lake elevations.

The last planning issue associated with marina facilities is related to exclusive use. Existing practice at New Melones Lake is to allow boat owners to store their watercraft indefinitely at marina facilities, a potential conflict with Reclamation Directives and Standards regarding exclusive use. This issue will be addressed in a formal houseboat policy currently being developed by Reclamation.  Conclusion: It is recommended that the provision of marina berths and moorings be included as part of future commercial services at New Melones Lake pending financial feasibility evaluation and resource considerations. Additional marina capacity should be considered in the context of the carrying capacity of the lake. All marina services should be provided as part of a single consolidated marina operation.

4.2.2 Marina Services: Dry Boat Storage Dry boat storage would allow boat owners to store their craft off the water, but still within the boundaries of Reclamation-managed lands. Options for dry boat storage include covered facilities that offer weather protection or uncovered storage yards. With dry boat storage, boats can be stacked on racks, allowing accommodation of considerable watercraft given space constraints. These facilities can be covered or uncovered, but are typically used in water bodies that are not subject to water level fluctuations. Currently, no dry storage is provided on Reclamation lands at New Melones Lake. However, there are private commercial operations near New Melones Lake that do provide opportunities for boat owners to store their boats, indicating an underlying demand for this service. These businesses include self-storage facilities that can provide covered and uncovered storage spaces; several facilities are located in the immediate vicinity of New Melones Lake, including one directly across the street from the Glory Hole access road. Another storage facility catering to boat and RV owners is located at the entrance road to the Tuttletown Recreation area.

Even with these nearby facilities, storing a boat near the lake and marina facilities on Reclamation-managed lands may provide added convenience to some boat owners. In addition, the demand for dry boat storage services may

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increase if it is determined that the marina should only be operated on a seasonal basis. Given the relatively large percentage of visitors who come from the Bay Area, it is likely that some visitors would wish to keep their boat on-site and not haul their boat back and forth across this distance. Another consideration is potential boat quarantine restrictions related to quagga mussels. Under such quarantine, boat owners could avoid repeated inspections by leaving their vessels at an on-site storage facility, which would increase the demand for dry boat storage. There may also be opportunities for the concessionaire to provide decontamination services to boat owners. Based on locally-available storage opportunities, proposed dry boat storage would need to be simple in scale to compete economically with private commercial operations. It is recommended that dry boat storage be provided at an uncovered storage yard, which would require minimal capital investment and be offered in conjunction with existing or future marina services.  Conclusion: It is recommended that the provision of dry boat storage be included as part of future commercial services at New Melones Lake pending financial feasibility evaluation and resource considerations. All marina services should be provided as part of a single consolidated marina operation.

4.2.3 Marina Services: Boat Repair An existing boat repair facility is located near the New Melones Lake Marina consisting of a small repair building within the marina storage yard. This facility allows boat owners to have their watercraft repaired while at the lake or between visits, which offers advantages relative to other repair facilities in the region. There is a clear demand for this type of service at the lake based on the existing demand for repairs performed at the current facility. Existing and future demand is supported by the large number of boat owners who recreate on the lake. Boat repair services should be provided by trained staff only and that do- it-yourself boat repairs not be allowed. To economize on investments in new facilities, the boat repair operation could be combined with dry boat storage and other potential marina services.  Conclusion: It is recommended that the provision of boat repair services be included as part of future commercial services at New Melones Lake pending financial feasibility evaluation and resource considerations. All marina services should be provided as part of a single consolidated marina operation.

4.2.4 Marina Services: Motorized Watercraft Rentals Motorized watercraft includes ski boats, wakeboarding boats, pontoon boats, houseboats, and fishing boats, all of which are permitted at New Melones Lake. Motorized watercraft rentals are currently provided at the existing marina. At the national level, it is anticipated that there will continue to be demand for

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motorized boating.33 Given the popularity of boating at New Melones Lake, future demand for rentals is likely to increase.

At New Melones Lake, expanded types of boat rentals could be incorporated with marina services. Such rentals typically provide the core services for a marina, and it is unlikely that these facilities could be successful without such rentals. Future demand for motorized rentals is likely to continue given existing demand and the appropriateness of boating at New Melones Lake. Motorized watercraft rentals should continue to be provided in conjunction with a marina.  Conclusion: It is recommended that motorized watercraft rentals be included as part of future commercial services at New Melones Lake pending financial feasibility evaluation and resource considerations. All marina services should be provided as part of a single consolidated marina operation.

4.2.5 Marina Services: Non-Motorized Watercraft Rentals Non-motorized watercraft rentals include flat-water kayaks, canoes, and paddleboats. The existing marina rented kayaks at one time but the demand was very low.34 Most of the boating activity at New Melones Lake is motorized, and some kayakers may prefer to boat in quieter locations such as higher elevations in the Sierras, where there are fewer motorized craft, or to sea kayak on the San Francisco Bay or in the ocean, for example. Further, many individuals who kayak or canoe own their craft as the cost of ownership is much cheaper than most motorized boats. Cordell (2008) cites kayaking as “fast growing;” however, it is unclear that flat-water non-motorized boating represents a significant commercial stand-alone opportunity at New Melones Lake. Therefore, non-motorized watercraft rentals could be authorized at a marina, but not necessarily required as a concession.  Conclusion: It is not recommended that the provision of non- motorized watercraft rentals be included as a stand-alone operation. It is recommended that non-motorized watercraft rentals be considered as an authorized use in conjunction with proposed marina facilities.

4.2.6 Food and Drink Service Currently, New Melones Lake has no prepared food or drink service. The existing marina store provides packaged foods, such as sandwiches and snacks. Food and drink service options could include a grill or snack bar, possibly with outdoor seating, and could serve beer or wine. The restaurant facility could take advantage of its location on the lake, which would provide a unique dining experience.

33 Cordell, 1999 34 Han, 2009

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It should be noted that many food and drink options are available in the area, specifically in Angels Camp or Sonora. However, these establishments do not provide the unique amenities that the lake provides, such as accessibility and lake views. A grill could be built on shore or floating on the lake, most likely associated with a marina. A facility along the shore may not be viable because of periodic drawdowns of the lake. A facility along the shore at full pool could be considerably less accessible as the water level drops. Therefore, a food and drink service would be better located on, rather than off, the water.  Conclusion: It is recommended that the provision of food and drink service be included pending financial feasibility evaluation and resource considerations. It is recommended that the outdoor grill should be incorporated as part of a full-service marina.

4.2.7 Recreation Supply and Convenience Store A recreation supply and convenience store would sell such items as fishing tackle, firewood, wakeboards, life jackets, and camping supplies, and basic food provisions. This type of store could also rent outdoor recreation equipment, such as mountain or road bikes. Currently, many of these items are available at the existing marina store. However, access to the marina is difficult when the water is low because parking is distant from marina facilities. Further, many fishing, camping, and other supplies are readily available in the communities surrounding New Melones Lake, including a full-service supply store near the entrance to the Glory Hole Recreation Area. Therefore, it is unclear that a stand- alone supply store is necessary, even given the demand from campers and boaters at the Glory Hole and Tuttletown Recreation Areas. It is more likely that the demand for recreation supplies would be better met at facilities operating in conjunction with another commercial service at the lake, such as a marina or RV Park.  Conclusion: It is recommended that the provision of recreation supplies be included pending financial feasibility evaluation and resource considerations. Such a facility should be provided as part of another commercial facility, such as the marina or RV Park.

4.2.8 Lake Tours and Cruises Lake tours and cruises would provide visitors with interpretive or dinner tours around New Melones Lake. The tours would likely be operated from a marina. While some demand for lake cruises is likely, it is not likely to be extensive. Cruises on San Francisco Bay and Lake Tahoe offer significant competition and challenges for a potential tour operator at New Melones Lake. Low water levels during drought years would further challenge an operator, as the access to scenic coves is reduced and the exposed shoreline is not as aesthetically appealing as at full pool. It is not expected that a lake tour and/or cruise concession would be successful as a stand-alone operation. However, it could be considered as an authorized service provided in conjunction with a marina, which could partner with local vendors (such as wineries) to provide periodic cruises.

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 Conclusion: It is not recommended that the provision of lake tours and cruises be included as a stand-alone commercial operation. It is recommended that lake tours and cruises be considered an authorized use in conjunction with proposed marina facilities.

4.2.9 RV Park An RV park would provide spaces for RV camping and associated services such as hook-ups. Currently, there are no hook-ups at New Melones Lake; however, the region has several RV parks, including one park opposite the road leading to the Glory Hole Recreation Area. There are some areas near Tuttletown that have previously been identified as potential locations for an RV park, and which would provide preferable access to the reservoir. Currently, California State Parks (2005) suggests that as baby boomers reach retirement, RV ownership and hence the demand for these services will increase to record levels. An RV park could also potentially provide an opportunity for a recreation supply store to be included. An RV park would have to be constructed outside of the lake’s Rural Natural Management Area.  Conclusion: It is recommended that the provision of an RV Park be included as a new commercial service pending financial feasibility evaluation and resource considerations.

4.2.10 Lodging For the purposes of this report, lodging includes cabins, yurts, motels, and hotels. Currently, land-based lodging is not available at New Melones Lake; however, lodging is available by houseboat. Land-based lodging would be affected by reservoir drawdown. Also, numerous hotels and motels are in the vicinity of New Melones Lake, especially in Sonora and Angels Camp. The Sonora Chamber of Commerce lists six lodging options on their website in Sonora; other lodging options are available throughout Calaveras and Tuolumne counties.  Conclusion: It is not recommended that the provision of overnight lodging facilities be considered for a commercial service at New Melones Lake.

4.2.11 Horseback Riding Stables Commercial horse stables can provide a number of services, including horse boarding, riding rentals, and guided interpretive trips. Boarding services would cater to existing horse owners that seek to maintain their horses near the area where they typically recreate. Riding rentals and interpretive rides are typically provided for introductory riders, including families with children. There are several commercial equestrian operations in proximity to New Melones Lake, including public facilities in Copperopolis, Murphys, and Groveland. These operations offer trail rides and some provide opportunities for horse boarding. In addition, one of these facilities is located at Pine Mountain Lake, a much smaller reservoir southeast of New Melones Lake.

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Despite other horse stables in the region, New Melones Lake offers a unique opportunity for equestrian-related services at a large water body, distinguished by lake views and opportunities to integrate other recreation activities at or near the lake with the riding experience. Such a facility could be incorporated into the proposed equestrian staging area planned at the Peoria WMA. The level of development for a horseback riding stable could range from a multi-purpose facility providing riding rentals and boarding with a permanent barn structure, or it could be a less-developed facility with portable corrals operating on a seasonal basis. Further evidence of local demand is found in the visitor survey, where horseback riding was a commonly cited activity that visitors would participate in if it were available. Given the apparent latent demand and the construction of a new equestrian facility, commercial equestrian services at New Melones Lake may be warranted.  Conclusion: It is recommended that the provision of a horseback riding stable be included as a new commercial service pending financial feasibility evaluation and resource considerations.

4.2.12 Adventure Outfitter Guide Services Adventure outfitter guide services may include rock climbing instruction, kayak instruction, and spelunking-related activities. It could also include a formal outdoor adventure school. In general, outfitting services cater to newcomers because moderate to highly experienced climbers or other participants frequently own their gear (or borrow from friends).

Introductory guide services are provided throughout Northern California in urban areas (e.g., at climbing walls, regional parks, and on San Francisco Bay), at or near ski resorts (e.g., Bear Valley and Northstar), and at National Parks (e.g., climbing school at Yosemite). It is expected that outfitters at New Melones Lake would be challenged, given the world class opportunities throughout Northern California. The New Melones Lake could potentially provide a location for an existing outfitter to provide introductory kayaking classes, but would likely not be a successful location for a permanent facility. Commercial opportunities (such as Moaning Caverns) abound in the adjacent counties, and it does not appear necessary to provide more opportunities at New Melones Lake.  Conclusion: It is not recommended that the provision of adventure outfitter guide services be considered for a commercial service at New Melones Lake.

4.2.13 Event Venue An event venue (not a campground amphitheater) would provide an opportunity for live events (theater or music) or possibly weddings. Currently, this type of facility is not available at New Melones Lake. However, many venues are available in the surrounding area, some associated with local wineries (such as Ironstone Vineyards). Further, there is potential for land use conflicts due to noise, which may be detrimental to nearby recreation uses such as camping.

4-9 FINAL – April 2011 New Melones Lake Commercial Services Study & Financial Feasibility Evaluation

 Conclusion: It is not recommended that an event venue be considered for a commercial service at New Melones Lake.

4.2.14 Mountain Bike Course or Park A mountain bike park would provide trails for mountain bikers. Individuals would pay a fee to ride the course, which could potentially be used for races or other special events. The Sierra Nevada mountains and foothills provide extensive opportunities for mountain biking. Further, Cordell (2008) noted that mountain biking participation has dropped substantially from earlier this past decade. It is unclear whether demand for mountain bike courses would be adequate to support a commercial operation at New Melones Lake.  Conclusion: It is not recommended that a mountain bike course or park be considered for a commercial service at New Melones Lake.

4.2.15 Whitewater Rafting (Guided) Whitewater rafting is possible in the New Melones Lake planning area when lake levels are low, during which times boaters can raft or kayak the Stanislaus River (near Camp Nine). Cassady and Calhoun (1995) describe the Camp Nine run as follows: “…whenever the reservoir is low enough to expose 5 or 6 miles of the river or more, some boaters will include Camp Nine on their itinerary…” (p. 79). The authors suggest it is a worthwhile run, a Class II-III run when the river is relatively low, but is sought by expert boaters during the spring melt. In fact, the river was run commercially in the early 1990s when the reservoir level was low for several years.35 The boating run could potentially be extended upstream if a low head dam were to be removed. Commercial operators cannot count on the availability of this stretch of river every year because high water levels inundate the area.

Further, it is unclear where commercial rafters would disembark and take-out. One option would be for commercial boaters to transfer from rafts to flat water kayaks when they reach the reservoir. Another option would be for commercial operators to tow the rafters to a boat ramp. However, interested whitewater outfitting companies could provide commercial access for the public by special use permit and with the understanding that the stretch can only be run during dry years.  Conclusion: It is recommended that Reclamation provide opportunity for commercial operators to obtain special use permits to provide whitewater rafting given appropriate reservoir conditions.

4.2.16 Fishing Guide Services Fish guiding services could include local outfitters who lead clients on the lake (either in an outfitting boat, but possibly in a client’s boat) to fish. Presumably, the outfitter would be a specialist in a fishing technique and/or would be

35 Personal communication, Tyler Wendt, OARS, March 8, 2010

4-10 FINAL – April 2011 Chapter 4 Review of Commercial Service Opportunities

knowledgeable about places to fish at the lake. Similar to whitewater boating, managing fishing outfitters and guide services may best be managed by special use permit.  Conclusion: It is recommended that Reclamation provide the opportunity for commercial operators to obtain special use permits to provide fishing guide services at New Melones Lake.

4.2.17 Seaplane School A seaplane school would teach students how to fly a seaplane and use New Melones Lake as an area to practice landing and taking-off. It is difficult to determine if there is demand for such a service. However, an operating seaplane school would be inconsistent with the preferred alternative of the recently released RMP.  Conclusion: A seaplane school is inconsistent with the RMP and is not recommended as a commercial service at New Melones Lake.

4.2.18 OHV Course An Off-highway vehicle (OHV) course would allow OHV enthusiasts to drive their vehicles in a somewhat controlled setting while certain challenges can be set up. There are many OHV trails available in the Sierra Nevada, especially on forest service lands. However, the operation of an OHV-course would be inconsistent with the preferred alternative of the recently released RMP.  Conclusion: An OHV course is inconsistent with the RMP and is not recommended as a commercial service at New Melones Lake.

4.2.19 Skeet & Target Shooting Skeet or target shooting consists of visitors practicing shooting guns in a generally controlled setting. However, it is not recommended that this activity be provided as a commercial service because it would be inconsistent with the preferred alternative of the recently released RMP.  Conclusion: Skeet and target shooting are inconsistent with the RMP and are not recommended as a commercial service at New Melones Lake.

4.2.20 Summary of Commercial Service Opportunities Table 4-1 summarizes the recommendations for the commercial services discussed above. The recommendations presented here are preliminary, as Reclamation may at a later date determine a commercial service is no longer necessary or that a service would be better provided, for example, through a special use permit rather than a concession agreement.

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Table 4-1. Summary of Commercial Services and Recommendation

Recommendation Required Authorized Concession Activity (Not Considered (Pending Considered Under Not Financial in Financial Special Use Recommended Service Feasibility) Feasibility) Permit or Allowed Marina Berths and X Moorings Dry Boat Storage X Boat Repair X Motorized Watercraft X Rentals Non-Motorized Watercraft X Rentals Recreation Supply Store X Food and Drink Service X Lake Tours and Cruises X RV Park X Lodging X Horseback Riding Stables X Adventure Outfitter Guide X Services Event Venue X Mountain Bike Course or Park X Whitewater Rafting X Fishing Guide Services X Seaplane School X OHV Course X Skeet & Target Shooting X

4.3 Location of Potential Commercial Services

Generally, the recommended location of many of the aforementioned commercial services would be in or around the existing developed areas, specifically the Glory Hole and Tuttletown Recreation Areas. Specifically, the recommended placement of new marina facilities is at a new location within the Glory Hole Recreation Area. The major issue with the location of the existing marina, as discussed in Section 4.2.1, is the tendency for it to be damaged due to waves and wind associated with strong storms. A subsequent marina siting study was undertaken to identify the preferred location of a new marina (Bureau of Reclamation, 2011). The recommended location of the proposed RV Park is along the entrance road at the Tuttletown Recreation Area, as originally planned

4-12 FINAL – April 2011 Chapter 4 Review of Commercial Service Opportunities in the 1976 Master Plan. The proposed equestrian riding stable is recommended to be located within the Peoria WMA to capitalize on integration with the proposed equestrian staging area planned there.

It is recommended that most of the services should be co-located for several reasons. First, all marina-related services should logically be developed together. In addition, other potential services, such as food and beverage service and the recreation supply store, would benefit from being combined with marina facilities to maximize sales and realize some economies of scale.

To facilitate siting of proposed commercial services, Chapter 5 includes a GIS- based recreation suitability analysis of the areas within the New Melones planning area (above full pool). The analysis considers various resource constraints to recreation development.

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Chapter 5 Resource Opportunities and Constraints

Chapter 5 Resource Opportunities and Constraints

5.1 GIS-Based Site Selection Analysis

A geographic information system (GIS) based analysis was conducted with an objective to determine sites potentially suitable for recreation development while considering potential resource constraints. The analysis uses existing data to classify the New Melones Lake planning area into three suitability categories: (1) high; (2) moderate; and (3) low. A final determination about suitability is not possible through this analysis for a few reasons. Information about the location of cultural resources is confidential and thus not included on the maps. Further, the maps are completed at a planning level scale and may not account for smaller-scale factors such as dense tree canopy or rock outcroppings. The site suitability maps are suggestive of places where recreation development may be possible; although, a comprehensive site survey would be necessary to confirm this.

5.2 Resource Opportunities and Constraints

The analysis was completed by first mapping opportunities and constraints based on existing data. Opportunities are factors favorable to the development of recreation facilities; constraints are factors not favorable to development. Opportunities are shown on Figure 5-1 and constraints are shown on Figure 5-2. The analysis was limited to lands within the New Melones Lake planning area boundary.

Opportunities considered in this analysis include the following:  Areas within 1,000 feet of existing roads  Rural Developed and Rural Natural areas in the WROS classification system  Areas with slope of less than 10 percent

Constraints considered in this analysis include the following:  Semi Primitive areas in the WROS classification system  Areas with slope of greater than 10 percent  Areas on or below the dam

5-1 FINAL – April 2011 Planning Area Boundary

New Melones Lake

Area within 1000 feet of existing roads

WROS Categories RD - Rural Developed Recreation

RN - Rural Natural Recreation

Slope less than 10% MA 44:70:9 @ 0102/8/3 - xdms.eitinutroppOs_ysilanA_1-5giFs_enoleMweNs\paM\EFF-PSC_senoleM_weNs\ctejorP\atadsig\c2me120S\\ - 0102/8/3 @ 44:70:9 MA nnamuaR.C - AC dnaklaO - proC SRU proC - dnaklaO AC - nnamuaR.C

Opportunities in Site Selection Analysis

New Melones Lake Area, California Central California Area Office

0 2 4 MILES Figure 5-1 Planning Area Boundary

New Melones Lake

Dam zone

Environmentally sensitive areas

WROS Category: SP - Semi Primitive Recreation

Slope greater than 10% MP 64:03:3 @ 0102/8/3 - xdms.tniartsnoCs_ysilanA_2-5giFs_enoleMweNs\paM\EFF-PSC_senoleM_weNs\ctejorP\atadsig\c2me120S\\ - 0102/8/3 @ 64:03:3 MP nnamuaR.C - AC dnaklaO - proC SRU proC - dnaklaO AC - nnamuaR.C

Constraints in Site Selection Analysis

New Melones Lake Area, California Central California Area Office

0 2 4 MILES Figure 5-2 New Melones Lake Commercial Services Study & Financial Feasibility Evaluation

 Environmentally sensitive areas (Environmentally sensitive areas, determined from the RMP, may include caves, aquatic spawning habitat, riparian habitat, raptor nesting areas, cultural sites, and other vulnerable habitats.)

5.3 Site Suitability

Recreation opportunities and constraints were combined to classify the planning area into three suitability levels: High Suitability; Moderate Suitability; and Low Suitability.

The following decision criteria were used to classify the planning area into the three categories:  An area that has one or more constraints is classified as “Low”  An area that does not have any “low suitability” attributes and is within 1,000 feet of an existing road is classified “High”  All other areas are classified as “Moderate”

Figure 5-3 shows the results of the site selection analysis on composite maps. Much of the study area is classified as “Low Suitability” mostly due to areas with slopes greater than ten percent. Limited areas are classified as “High Suitability” including areas primarily near both Tuttletown and Glory Hole Recreation Areas. Other areas with high suitability include areas at the south end of the planning area. Although, some areas are shown as high suitability, final verification is necessary with a site survey considering other characteristics such as cultural resources (which are confidential).

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Recreation/Wildlife Area

New Melones Lake

Suitability level (see note below)

High

Moderate

Low MP 02:10:4 @ 0102/8/3 - xdms.tlsueRs_ysilanA_3-5giFs_enoleMweNs\paM\EFF-PSC_senoleM_weNs\ctejorP\atadsig\c2me120S\\ - 0102/8/3 @ 02:10:4 MP nnamuaR.C - AC dnaklaO - proC SRU proC - dnaklaO AC - nnamuaR.C

Note: Results presented are from a planning-level analysis; final determination about the suitability of an area for recreation development would require a site-level analysis and Results of Site Selection Analysis consideration of potential cultural and biological resources.

New Melones Lake Area, California Central California Area Office

0 2 4 MILES Figure 5-3

Chapter 6 Engineering Review

Chapter 6 Engineering Review

Chapter 6 presents a review of the conditions of existing marina and the estimated costs to remediate marina facilities at New Melones Lake. A field condition assessment was performed for the existing marina and was used to prepare cost estimates addressing the replacement of unusable components determined to have a remaining useful life of five years or less, and the cost of relocating useable components to another, more sheltered location on the lake. The cost to replace unusable components would be the approximate cost to refurbish the marina in its present location to begin another concession lease period. The replacement cost for unusable components added to the cost to relocate useable facilities would be the approximate cost for a marina at a different location on the lake to begin another concession period. The complete technical memorandum is included as Appendix B.

6.1 Field Condition Assessment

The scope of the review included the floating components of the marina and the land-based infrastructure directly supporting the floating components.36 A field visit was conducted that covered on-shore facilities and a boat tour of floating facilities.

Based upon information shown on the New Melones Lake Marina Long Term Development Plans, there are two configurations for the marina, a winter layout and a summer layout. According to the concessionaire, the winter layout is necessary due to the high wave action and potential for damage during the inclement weather months. The marina layout observed during the field visit was the winter layout. Referenced drawings are included in Appendix B.

The field study included a review of conditions of the marina, including estimated remaining service lives and costs to replace key facilities. The current marina concessionaire indicated that the useful life for both existing and future marina infrastructure is affected closely by the severity of winter storm damage due to wind and large waves. The current marina location is not adequately protected by either a land mass or wave attenuation of some sort to mitigate the damage to the docks or floating structures.

Table 6-1 summarizes the major marina components observed during the site visit and provides the estimated remaining useful life that would be expected in a protected location. Protection could be provided by relocating the marina to a

36 Other land-based buildings and infrastructure (e.g., pavement, lighting, etc.) will be assessed separately.

6-1 FINAL – April 2011 New Melones Lake Commercial Services Study & Financial Feasibility Evaluation

more sheltered cove or providing suitable wave attenuators. Without either action, the useful life estimates shown in the table could be further reduced. Table 6-2 describes the components listed in Table 6-1, including the estimated remaining useful service live for each.

Table 6-1. Condition Assessment Summary

Item Description Remaining Useful life Reuse Potential A Marina Overview -- -- B Marina Utility Shed 0 None C Covered Boat Dock - East 10 Low D Mooring Dock 20 High E Covered Boat Dock - Central 15 High F Houseboat Dock - West 20 High G House Boat Service Dock 5 Low H Marina Store 5 Low I Dock Attached to Marina Store 3 Very Low J Entrance Ramp 10 High K Gas Dock 0 None L Houseboat Anchorage 10 Medium M Land Based Infrastructure / Facilities 10 Low

Table 6-2. Condition Assessment Detail Item Description Comment A Existing Marina --

B Marina Utility Shed According to the concessionaire, the marina utility shed was damaged and dislodged from the main marina structure during recent winter storms. It was relocated to the east portion of the marina for storage. Based on observed conditions, this structure has no useful life remaining. Reference pictures B1 through B2 C Covered Boat Dock - East This covered dock is in fair condition. The dock is built upon exposed styrofoam floats which are showing some signs of deterioration. Useful life is estimated to be 10 years if expanded polystyrene foam (EPS) is allowed to remain. Assumption is made that exposed styrofoam floats will no longer be allowed and must be replaced. Based on this assumption, useful life estimated to be 0 years or a significant re-float effort may be required. Reference pictures C1 through C6. D Mooring Dock The mooring dock is in very good condition and appears relatively new. The dock is supported by encapsulated EPS floats. Useful life is estimated to be at least 20 years. Reference pictures D1 through D4 E Covered Boat Dock - Central The covered dock is in good condition and is supported by encapsulated EPS floats. Useful life is estimated to be at least 15 years. Reference pictures E1 through E6

6-2 FINAL – April 2011 Chapter 6 Engineering Review

Table 6-2. Condition Assessment Detail Item Description Comment F Houseboat Dock - West The houseboat dock is one of the newer docks in the marina and appears to be in very good condition. The dock contains power and water facilities and is supported by encapsulated EPS floats. Useful life estimated to be at least 20 years. Reference pictures F1 through F10 G House Boat Service Dock The houseboat service dock is constructed of concrete and is supported by an unknown substrate. The dock is showing signs of cracking and spalling edges and would not likely be conducive to supporting a modern marina operation. Useful life estimated to be 5 years. Reference pictures G1 through G7. H Marina Store The marina store is in fair to poor condition. The bathrooms have been recently remodeled; however the remaining facility is showing substantial wear and damage. The structure is supported on exposed EPS floats which show significant deterioration. In addition, the decking panels are generally in disrepair. The sewage ejection system with radio based level controls appears new and could be salvaged. The electrical transformers and panels are beginning to rust. Maintenance on the power distribution panel has probably been minimal. Some electrical equipment is installed with substandard wiring techniques. Electrical terminations and components have probably corroded and aged prematurely in the marine environment. The remaining MEP components are nearing the end of their useful life, although some components may have salvage value. No roof leaks were observed. Useful life estimated to be 5 years if exposed styrofoam is allowed to remain. Assumption is made that exposed styrofoam floats will no longer be allowed and must be replaced. Based on this assumption, useful life estimated to be 0 years. Reference pictures H1 through H39. I Dock Attached to Marina The dock directly attached to the marina store is constructed of wood and Store a composite walking surface. Deterioration was observed from wave damage and boat abrasion/ impact. Useful life estimated to be 3 years. Reference pictures I1 through I7. J Entrance Ramp The entrance ramp onto the marina appears to be in relatively good condition. The ramp is supported on encapsulated floats. Useful life estimated to be 10 years. Reference pictures J1 through J4. K Gas Dock The gas dock is constructed of wood decking and is a state of extreme disrepair. While it appears that the dock is currently being repaired to mitigate any further deterioration, useful life estimated to 0 years. Reference pictures K1 through K3. L Houseboat Anchorage The houseboat anchorage consists of a grid of cables and mooring balls as depicted on the LTDP drawing 5. While the system appears to be in good condition, a significant portion of the system will have to be reconstructed if the marina is relocated. Useful life estimated to be 10 years. Reference pictures L1 through L3. M Land Based Infrastructure The land based facilities that support the floating marina consist of septic and Facilities tanks and piping, fuel storage and piping, fuel island, electrical transformer, main power switchboard, underground and exposed conduit, portable power cables, and a water supply and piping. In addition, there are the access road, two parking areas, fencing, the well site, and a shop/office building. The access road within the scope of this study includes that portion within the marina boundary, not the entire length from the intersection with Highway 49 to the marina. These facilities are in fair condition. Due to low lake levels, it appears that that a new septic poly tank was added and electrical cables have been extended to the floating facility. Average useful life estimated to be 10 years. Reference pictures M1 through M11.

6-3 FINAL – April 2011 New Melones Lake Commercial Services Study & Financial Feasibility Evaluation

6.2 Cost Estimates

Two sets of cost data have been developed based on the assessment of conditions at the New Melones Lake Marina. The first includes Class 4 conceptual estimates of the expenditures that would be required to replace structures with useful lives of less than 5 years and to refurbish land-based infrastructure; those costs aggregate to over $2.95 million.37 The second set of costs is for relocating the marina to mitigate the storm damage potential that exists at the present site; estimated relocation costs aggregate to over $760,000 for a total cost of approximately $3.7 million.38 Additionally, a Class 4 conceptual-level estimate was developed to price the replacement of the entire marina, regardless of age or condition, at its existing location. Those costs aggregate to $4.73 million ($4.01 million to replace the floating marina components plus $0.72 million to replace land-based components).

All cost estimates are based upon 2010 dollar values, are based on four percent cost escalation to year 2012, include a 15-percent contingency for contractor markup, and a 15-percent contingency for design. For more detail on the engineering cost estimates, refer to Appendix B.

37 Facilities included in the cost estimate are the marina utility shed, covered boat dock, mooring dock, houseboat dock, house boat service dock, marina store, dock attached to marina store, entrance ramp, gas dock, houseboat anchorage, and other land-based infrastructure and facilities. 38 Facilities and activities included in the cost estimate are the floating component relocation, parking lot, lighting, access and launch ramp concrete, electrical substation, distribution to first connection point, fuel tank, fuel piping and equipment, septic tank, septic piping, and water piping.

6-4 FINAL – April 2011 Chapter 7 Financial Feasibility Evaluation

Chapter 7 Financial Feasibility Evaluation

This section represents the financial feasibility evaluation for prospective commercial services at New Melones Lake, focusing on those services that would be provided under concessions contracts. This section first provides a general overview of financial feasibility studies, their role in business planning, and common measures of financial feasibility. Next is a summary of the financial feasibility evaluation as it relates specifically to commercial services at Reclamation facilities, including the key factors and framework used to estimate financial feasibility. This financial framework is applied to prospective commercial services under consideration at New Melones Lake. Because there is substantial uncertainty in the assumptions used in this evaluation, this section also presents a sensitivity analysis that shows how financial performance changes with changes in key assumptions.

It should be noted that the financial feasibility evaluation presented in this chapter is based on planning-level estimates of capital and development costs and operating revenues and expenses. Accordingly, the results are not intended to provide assurances regarding the financial profit or loss of prospective commercial services at New Melones Lake. Instead, the results of the financial feasibility evaluation should be considered in the context of the analytical assumptions implicit to the analysis and used as an indicator of financial performance of prospective commercial services. Further, although Chapter 4 considers the effects that future water level fluctuations at New Melones Lake may have on the demand for concessions services, it is not possible to accurately estimate the effect of long-term water supply management at the reservoir on the financial feasibility of prospective commercial services.

7.1 Overview of Financial Feasibility Studies

7.1.1 Role of Financial Feasibility in Business Planning Government statistics show that the failure rate for new businesses is high. According to the U.S. Small Business Administration, roughly half of small businesses fail within the first five years.39 Success is based on, and requires, exhaustive planning and research in many areas, including such factors as competition, demand, marketing, and pricing. All of these factors, and potentially many others, are integral to the assessment of the financial feasibility of a proposed business.

39 Small Business Administration. Website: http://www.sba.gov/smallbusinessplanner/plan/getready/SERV_SBPLANNER_ISENTFORU.html, accessed March 8, 2010.

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Financial feasibility evaluation in the broadest sense refers to the assessment of the potential success or failure of a business measured against specific financial thresholds. If in planning for a new business, a potential entrepreneur or investor concludes that the business will meet or exceed those thresholds, the business may be considered to be financially feasible.40 Given the alternative uses and scarcity of capital and because of the risks associated with any new business, a financial goal will typically include some measure which exceeds that which could be earned in a risk-free investment, such as U.S. Treasury debt instruments.41

7.1.2 Measures of Financial Feasibility Within capitalistic systems, financial feasibility most typically involves some measure of profitability from a business. Common metrics include net profit; earnings (profit) before interest, depreciation, taxes, and amortization (EBIDTA); return on investment (ROI); and internal rate of return (IRR).

Net profit refers to the difference between revenues from all sources and all costs, including income taxes. It includes both operating and non-operating measures, the former arising from the actual sale of the specific goods and services produced by the enterprise. Non-operating costs reflect the administrative and related expenses required in running any business, but not specific to the goods and services being sold.

EBIDTA is a quantitative description of the operating profitability of a business. It is measured by subtracting from total operating revenues all costs, excluding interest, depreciation, taxes, and amortization. The four excluded expenses may vary significantly even among businesses of similar size within the same industry. Differences arise because of variations in many areas, including:  Assets – current, e.g. cash and inventory, versus fixed, e.g. buildings and machinery  Liabilities – debt, i.e. owed to lenders, versus equity capital, provided by business owners  Interest expenses, which may differ because of the times that loans were obtained, amount of debt versus equity financing, length of loans, and guarantees and collateral required by lenders  Depreciation, which will differ depending on the service lives of capital assets and when they are actually purchased  Taxes, which vary depending on different rate structures both between and within states

40 The ultimate success or failure of the business will, of course, support or refute the preliminary judgment of financial feasibility. 41 “Risk free” as used here means that return on capital during the term of the instrument and return of capital at maturity of the instrument are both without risk.

7-2 FINAL – April 2011 Chapter 7 Financial Feasibility Evaluation

 Amortization, which for a new business typically refers to the payment of a loan over a specified number of periods and which may differ among borrowers

Because EBIDTA excludes these expenses, which can vary widely among otherwise similar businesses, it is considered a better measure of the actual operating finances of a business than, e.g., net profit.

Return on investment (ROI) is a measure that can be used to assess the profitability of an investment or to choose from among alternative investments. ROI can be expressed for a single period or for multiple periods. In its simplest form, ROI is measured as the ratio:

(Gain from investment – cost of investment) / (Cost of investment)

Internal rate of return (IRR) is the annualized effective compounded return rate that can be earned on the invested capital. It represents the interest (discount) rate which equates the cost of an asset with the present value of the expected cash flows from the investment over time. It is typically calculated using the formula:

Cost of asset = Present value of anticipated cash flows

The IRR calculation rests on a critical assumption that all cash flows from an investment are reinvested by the business through the end of the investment’s service life.

7.2 Financial Feasibility in the Commercial Service Planning Process

Financial feasibility evaluation plays an important role in the commercial service planning process at Reclamation facilities. The evaluation of financial feasibility is a required component of commercial services plans, as outlined in Reclamation Manual, Directives and Standards, LND 04-01. This section presents the financial framework applied to the financial feasibility evaluation for commercial services at New Melones Lake.

The primary purpose of the financial feasibility evaluation is to determine whether proposed commercial services are financially viable. Ancillary purposes include estimating fees to be returned to the federal government, providing justification for the proposed length of term of concessions contracts, and estimating capital investment responsibilities for the concessionaire and Reclamation.

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7.2.1 Key Factors Affecting Financial Feasibility There are a number of key factors that affect the financial feasibility of recreation-oriented services provided at Reclamation facilities. Each is discussed in more detail below relative to proposed services at New Melones Lake.

Visitation Projections One of the primary factors affecting the financial viability of recreation-based commercial opportunities is visitation levels. Annual visitation at New Melones Lake has averaged over 700,000 visitors between 2004 and 2008, and has been driven by a number of factors, including lake level and economic conditions. Population in the primary market area is a key factor influencing recreation demand at the lake. While it is difficult to forecast hydrologic and economic conditions, population projections are available from the California Department of Finance. Population projections for the primary market area serving New Melones Lake are presented in Table 3-5. The data show that population is expected to increase by approximately 1.1 to 1.3 percent annually through year 2050. For this analysis, these rates were used to project sales and operating revenues for select commercial services over the term of concessions contracts.

Length of Season Typical for most types of recreation, visitation levels at New Melones Lake fluctuate seasonally. Visitation at New Melones over the peak recreation season (i.e., May through September) accounts for approximately 62 percent of total visitation at the lake (see Table 3-3). In addition, water-based activities, such as boating, are most common during the summer months when the air and water temperatures are relatively warm. These patterns are of particular importance for commercial services that focus on water-based recreation, such as marina facilities. These types of facilities are subject to substantial fluctuations in operating revenues over the course of the year, which could make it difficult to recover operating costs during the off season. Accordingly, the financial feasibility evaluation considers both year round and seasonal (May-September) operation of prospective commercial services.

Rates The rates charged by prospective commercial operators have a direct influence on operating revenues. Rates for all commercial services operated under a concessions contract must be approved by Reclamation on an annual basis. For those services already provided at the existing marina, the current approved rate structure was used in the financial feasibility evaluation. For services not currently provided at New Melones Lake, prospective rates were based on research on commercial operations offering similar services in the region. Differences in rates across seasons can also factor into concessions planning, with higher rates charged during peak demand periods and lower rates in off- peak periods.

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Term of Concessions Contract LND 04-01 states that the term of all contracts should be limited to the shortest period practical and should be based on the investment required of the concessionaire. The term of the contract requiring minimal or no new capital investment should generally not exceed five years, and when substantial investment is required, the term should be set to ensure that concessionaires receive a reasonable rate of return on their investment. All of the prospective commercial services under consideration at New Melones Lake would require a large capital investment for facility development. As a result, the term of the concessions contract would need to extend well into the future. Based on contracts recently implemented at other Reclamation facilities, three different contract terms were considered in this evaluation: 20, 30, and 40 years.

Capital Investment Responsibility Initial capital investment costs can directly affect the financial viability of any business, including prospective commercial service ventures at New Melones Lake. The decision by Reclamation to participate in any type of cost-sharing arrangement could also affect the required returns to the federal government in the form of franchise and occupancy fees. However, cost-sharing opportunities are only available to non-federal partners and do not apply to private concessionaires. Therefore, for this analysis, only one scenario was considered where the concessionaire would be responsible for all capital costs.

Appropriate Rate of Return on Capital Investment By definition, capital is a scarce resource with many potential uses with equally many potential returns and risks. The owners of capital can be reasonably assumed to seek a minimum level of financial return on the capital they invest in a business. That minimum level is frequently approximated as the sum of a risk-free return (e.g. that on U.S. government debt instruments) and an allowance for risk. The incremental desired return for risk will vary widely among capital owners depending on such factors as their knowledge of and experience in businesses and alternative uses of capital. Thus, if a government security of a particular maturity yields a risk-free 5 percent annual return and a capital owner requires an additional return of 10 percent annually to compensate for risk, the threshold return for that owners would be 15 percent per year. If owners determine that the capital investment is likely to provide a return of at least that level, they would invest the capital, all other factors equal. If the expected return is less than the required level, they would not make that investment.

Fees Paid to the Federal Government Fees paid to the federal government for the right to operate commercial services at Reclamation facilities may include franchise and occupancy fees. Franchise fees are typically payments made to the government based on a percentage of gross revenues. Occupancy fees represent a flat-rate rent paid by the concessionaire for use of the federal estate. Franchise and occupancy fees are typically negotiated on a case-by-case basis depending on the specific

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circumstances of each commercial opportunity. For this analysis, a range of franchise and occupancy fees is considered to evaluate financial feasibility, centered on the current franchise fee of four percent and occupancy fee of $1,000 for the existing marina operation.

7.2.2 Financial Feasibility Framework The framework used to conduct the financial feasibility evaluation is founded on basic financial and accounting concepts and reflects Reclamation’s requirements outlined in LND 04-01. This section provides an overview of financial concepts that have been applied to prospective commercial services at New Melones Lake. Specifically, for each commercial service, the following financial information is provided in Section 7.3.

Income and Expense Statement An income and expense statement compares operating and non-operating revenues and expenses over a specified period such as a month, quarter, or year. For this study, operating revenues represent gross revenues (or sales) and are organized by operating department (i.e., source of revenue). For example, a marina may realize revenues from slip rentals, boat rentals and gas sales; estimated revenues are tracked separately for each. Operating expenses include payments to labor, cost of goods sold, and utilities and repairs and maintenance. Non-operating expenses include general and administrative expenses, such as rent, interest, depreciation, reserve accounts,42 and payments to the federal government as franchise and occupancy fees. Based on the income and expense statement for the prospective commercial services at New Melones Lake, several measures of financial feasibility can be estimated, including EBIDTA and net profit.

Capital Investment Requirements Capital investment requirements of any business venture can greatly affect financial feasibility. Capital costs associated with prospective commercial service developments at New Melones Lake would include the cost of new facility development (e.g., structures and utilities); furniture, fixtures and equipment that are used to provide services; and ongoing capital replacement, particularly with long-term concessions contracts. Estimates of capital investment requirements have been prepared for prospective commercial services at New Melones Lake.

Cash-Flow Analysis A cash-flow analysis shows the cash which a business will generate over time and excludes non-cash expenses, such as depreciation. It allows one to evaluate financial performance at different periods of time. For example, initial capital investment costs typically generate negative cash flow in the early years of

42 Reserve accounts can come in the form of a Reserve Account for Facility Improvement (RAFI), which is needed to make funds systematically available for the ongoing improvement, construction, and renovation of concession facilities, specifically, significant nonrecurring capital improvement projects.

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business ventures. A cash-flow analysis also considers periodic capital replacement costs and reimbursement for fixed assets at end of contract.

7.3 Financial Feasibility of Proposed Commercial Services at New Melones Lake

This section presents the results of the financial feasibility evaluation for prospective commercial services at New Melones Lake. The focus of the financial analysis is on those services that would be operated under concessions contract, rather than special use permits. Other authorized uses, which can be provided at the discretion of the concessionaire, are excluded from the analysis.

Based on the results of the commercial service planning process, there are three sets of commercial services considered in the financial feasibility evaluation: (1) marina services; (2) RV Park; and (3) equestrian riding stables. For this analysis, each type of concession opportunity is analyzed independently. A set of analytical assumptions common to all concessions is presented first and represents the “base case” for the financial evaluation. Facility-specific assumptions are presented in Appendix C. For each prospective concession, a general description is provided to further characterize and describe the type of service under consideration.

Following is the financial evaluation, which consists of four parts. The first is an estimate of capital investment costs, which is based on information collected for comparable facilities and business operations. The second is an estimate of annual operating income and expenses, which is based on assumptions concerning rates (prices) and projected sales over time, which are a function of projected visitation levels and capacity levels of proposed services. Third is a cash-flow analysis that shows how the financial performance of proposed concessions would vary over the contract term. The last is a financial summary that reports key financial metrics, including EBIDTA, net profit, net present value of cash flow, return on investment (ROI), and internal rate of return (IRR). (More detailed tables reporting year-by-year results are presented in Appendix D.) A sensitivity analysis that shows how these financial metrics vary with changes in key assumptions is presented in Section 7.4.

7.3.1 Analytical Assumptions For the purposes of the financial feasibility evaluation, several key analytical assumptions were made that are applicable to all concessions opportunities under review. These assumptions are tied to factors described in Section 7.2.1. Changes in these assumptions can affect the financial feasibility of the concession opportunities, which is illustrated by the sensitivity analyses presented in the financial summary for each concession. Unless otherwise noted, the key assumptions are as follows:

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 Visitation: Visitation is projected to increase at the rate of population growth in the primary market area, approximately 1.1 to 1.3 percent per year. Increases in visitation are assumed to influence gross sales for a range of concessions services.  Length of Season: It is assumed that all concessions would operate year round.  Rates: The rates charged for concessions services are based on current rates (for existing marina services) and market research for new services not currently available at New Melones Lake.  Term of Concessions Contract: All concessions contracts are assumed to be 30 years.  Capital Investment Responsibility: The prospective concessionaire would be responsible for all capital investment (development) costs.  Appropriate Rate of Return on Capital Investment: The appropriate rate of return on capital, or discount rate, is 15 percent.  Fees Paid to the Federal Government: The franchise fee on all concessions is 4 percent of gross revenues. An additional occupancy fee of $1,000 per year is also levied on all concession operations.

7.3.2 Marina Services The financial feasibility evaluation for marina services is based on the development of a new marina at its existing location, including complete replacement of all floating and land-based components; it does not include marina relocation. The analysis considers an integrated marina complex that provides the following services: slip and mooring rentals, houseboat rentals, other motorized watercraft rentals, a recreation supply and convenience store, dry boat storage, boat repair, and prepared food service (outdoor grill). It is assumed that the physical capacity of the new marina would be similar to the current marina. Key assumptions regarding the size, equipment, and operations of the marina are presented in Table C-2.

Capital Investment Costs Table 7-1 shows estimated capital investment costs for all facilities included in the marina complex. These values are based on capital cost estimates for the marina from Appendix B,43 cost estimates for other integrated marina facilities based on comparable marina developments, and current market prices for watercraft. In total, the development costs for the suite of marina facilities is approximately $8.4 million. The largest component of capital costs is the marina-related buildings and structures at a cost of $4.7 million. The other significant cost component is the purchase of rental watercraft, requiring over $3.4 million in up-front expenditures.

43 See Appendix B Table 6

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Table 7-1. Capital Investment Costs for Marina-Related Services Operating Department Dry Boat Category Marina Boat Rental Restaurant Storage Total Planning and Design $0 $7,000 $12,000 $4,751,000 Site Clearing & Preparation $0 $0 $5,000 $5,000 Vertical Building Costs $0 $50,000 $142,000 $192,000 $4,733,000 Miscellaneous Costs $3,439,000 $34,000 $0 $3,473,000 Power Connection $0 $0 $0 $0 Parking Space Development $0 $0 $0 $0 Total $4,733,000 $3,439,000 $91,000 $158,000 $8,421,000

Operating Revenues and Costs Income and expenses for marina services were developed based primarily on financial statements and operating trends for existing marina operations over the past several years; this information is implicit to the operating assumptions outlined in Appendix C (Table C-2). For example, the multi-year waiting list for slip rentals maintained by the existing marina operator indicate that these facilities would operate at or near capacity over the contract term assuming no change in the number of slips and moorings. In addition, it was assumed that the rates charged for marina services would be similar to the current rate structure presented in Section 2.4.1. For new services recommended at the marina (i.e., dry boat storage and food service), revenues and cost data are based on information collected from comparable facilities.

The income and expense statement for marina services is shown in Table 7-2.44 Operating revenues are projected to range between $2.70 million and $3.31 million annually over the contract term of 30 years. The largest source of revenues is expected to come from boat rentals, primarily houseboats. Rental of mooring and slip spaces is also expected to be a key generator of revenue based on keeping the size of the marina comparable to existing facilities and high occupancy rates.

Labor costs are the largest expense for the marina, about $838,000 annually. Other substantial expenses include the costs of items sold, maintenance and repair, insurance, and payments to the federal government as franchise fees and occupancy rates. Franchise fees generated by marina operations are projected to range from $107,000 to $132,000 annually over the contract term.

44 Income and expenses are shown in five-year increments. Data for all years are presented in Appendix D.

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Table 7-2. Operating Revenues and Expenses for Marina-Related Services

Average Annual Values Years Years Years Years Years Years 1-5 6-10 11-15 16-20 21-25 26-30 REVENUES BY OPERATING DEPARTMENT Moorings and Slip Rentals $990,000 $990,000 $990,000 $990,000 $990,000 $990,000 Gas Sales $237,000 $253,000 $270,000 $288,000 $306,000 $323,000 Boat Repair $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 Boat Rentals $1,082,000 $1,155,000 $1,232,000 $1,314,000 $1,398,000 $1,476,000 Recreation Supply Store $114,000 $121,000 $129,000 $138,000 $147,000 $155,000 Dry Storage $74,000 $79,000 $84,000 $90,000 $95,000 $101,000 Outdoor Grill $181,000 $193,000 $206,000 $219,000 $233,000 $246,000 Total Annual Operating Revenues $2,697,000 $2,810,000 $2,930,000 $3,058,000 $3,189,000 $3,310,000 EXPENSES Cost of Sales $286,000 $305,000 $325,000 $347,000 $369,000 $389,000 Personnel Expenses $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 Maintenance & Repair $211,000 $225,000 $240,000 $256,000 $272,000 $287,000 Other Operating $15,000 $16,000 $18,000 $19,000 $20,000 $21,000 Insurance $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 Franchise Fee $107,000 $112,000 $117,000 $122,000 $128,000 $132,000 Annual Lease $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 Refunds $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 Total Annual Operating Expenses $1,613,000 $1,652,000 $1,693,000 $1,737,000 $1,782,000 $1,823,000 Income Taxes (Federal & State) per yr $64,000 $99,000 $136,000 $173,000 $210,000 $244,000 Depreciation per yr $475,000 $475,000 $475,000 $475,000 $475,000 $475,000 Interest per yr $442,000 $442,000 $442,000 $442,000 $442,000 $442,000 Total Expenses per yr $2,593,000 $2,667,000 $2,746,000 $2,827,000 $2,909,000 $2,985,000 EBITDA $1,085,000 $1,158,000 $1,237,000 $1,321,000 $1,407,000 $1,487,000 Net Profit ($) $104,000 $143,000 $184,000 $231,000 $280,000 $326,000 Net Profit (% of Revenues) 3.9% 5.1% 6.3% 7.6% 8.8% 9.8%

Accounting for income and expenses, estimates of EBIDTA for marina facilities are between $1.09 million and $1.49 million per year. Taking into account taxes, depreciation and interest, net annual profits are estimated at $104,000 to $326,000, equating to annual profit rates (relative to gross revenues) of 3.9 percent to 9.8 percent.

Cash-Flow Analysis Estimates of cash flow at specific years during the contract term are shown in Table 7-3.45 Initial cash investments to cover the non-financed portion of capital costs are reflected in Year 0. Cash flows fluctuate based on the need for periodic replacement of capital and changes in operating revenues and costs. At the end of the contract term, estimated cash holdings are approximately $14.96 million.

45 Cash flow data for all years are presented in Appendix D.

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Table 7-3. Cash-Flow Analysis for Marina-Related Services Year 0 5 10 15 20 25 30 Cash In Beginning Cash $0 ($260,000) $2,445,000 $4,494,000 $7,632,000 $10,157,000 $13,792,000 Sales $0 $2,740,000 $2,856,000 $2,979,000 $3,110,000 $3,241,000 $3,379,000 Other Revenues $0 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 Sale of Assets $0 $0 $0 $0 $0 $0 $1,292,000 Total Available Cash $0 $2,481,000 $5,302,000 $7,474,000 $10,744,000 $13,399,000 $18,464,000 Cash Out Salaries $0 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 Other Operating Expenses $0 $790,000 $829,000 $872,000 $917,000 $962,000 $1,009,000 Loan Payments $189,000 $509,000 $509,000 $509,000 $509,000 $509,000 $509,000 Capital Expenditures $2,105,000 $9,000 $868,000 $9,000 $868,000 $9,000 $883,000 Tax Payments $0 $77,000 $113,000 $151,000 $188,000 $225,000 $264,000 Total Cash Out $2,295,000 $2,223,000 $3,158,000 $2,379,000 $3,321,000 $2,542,000 $3,503,000 Annual Cash Flow ($2,295,000) $519,000 ($302,000) $601,000 ($209,000) $700,000 $1,169,000 Cumulative Cash Flow ($2,295,000) $259,000 $2,144,000 $5,095,000 $7,423,000 $10,857,000 $14,961,000

Note: Values represent specific points in time; a complete year-by-year cash-flow analysis is available in Appendix D

Financial Summary46 Table 7-4 shows the results of the financial feasibility evaluation for the proposed marina, as measured by the key financial metrics considered in this study. On an annual basis, EBIDTA and net profit are projected to average $1.28 million and $212,000, respectively. In net present value terms, the annualized cash flow for marina services is approximately $136,000 and about $895,000 cumulatively. Over the contract term, the ROI for the marina is estimated at 10.6 percent and the IRR is 21.8 percent. Based on these metrics, the financial feasibility evaluation indicates that a comprehensive full-service marina facility would likely be financially viable over the long term.

Table 7-4. Results of the Financial Feasibility Analysis for Marina-Related Services Financial Metric Annual Average Cumulative EBIDTA $1,284,000 $38,528,000 Net Profit ($) $212,000 $6,367,000 Net Present Value of Cash Flow $136,000 $895,000 ROI -- 10.6% IRR -- 21.8%

46 The summary of financial information for all prospective concessions at New Melones Lake are based on planning- level estimates and are not intended to ensure the profit or loss of any concession opportunity considered in this study.

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7.3.3 RV Park As analyzed, the RV Park consists of a 75-unit campground supplemented by a small campground store selling recreation supplies and convenience store items. Initial occupancy rates are assumed to be about 50 percent during the peak recreation season and 25 percent during off-peak periods, which are in line with national averages. Because the RV facility would not be operating at capacity, campground registration revenues are expected to increase in line with projected increases in visitation to the lake. Accordingly, campground occupancy rates would increase over time with no change in campground capacity.

Capital Investment Costs Based on representative costs for other RV campground developments, estimated capital costs for the proposed RV Park is approximately $821,000 (see Table 7-5). Of this total, power costs account for $320,000, followed by parking space development at $233,000 and building costs at $130,000.

Table 7-5. Capital Investment Costs for RV Park Category Cost ($) Planning and Design $61,000 Site Clearing & Preparation $40,000 Vertical Building Costs $130,000 Miscellaneous Costs $38,000 Power Connection $320,000 Parking Space Development $233,000 Total $821,000

Operating Revenues and Costs As shown in Table 7-6, annual average operating revenues at the RV Park would be generated primarily by campground registrations, which range from $480,000 to $655,000 annually over the contract term. The assumptions behind revenue projections for an RV Park are outlined in Appendix C (Table C-3). Total average annual operating revenues and expenses are estimated to range from $578,000 to $788,000 and $421,000 and $522,000, respectively. Based on these assumed revenues and expenses, the estimated average annual EBIDTA is $157,000 during years 1-5 and increases to $266,000 by years 26-30. Annual net profit expected to be earned at the RV Park increases from 11.7 percent in years 1-5 to 15.8 percent in years 26-30.

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Table 7-6. Operating Revenues and Expenses for RV Park Average Annual Values Years 1-5 Years 6-10 Years 11-15 Years 16-20 Years 21-25 Years 26-30 REVENUES BY OPERATING DEPARTMENT Registrations $480,000 $512,000 $546,000 $583,000 $620,000 $655,000 Store Sales $98,000 $104,000 $111,000 $119,000 $126,000 $133,000 Other Income $0 $0 $0 $0 $0 $0 Total Operating Revenues $578,000 $616,000 $658,000 $701,000 $746,000 $788,000 EXPENSES Cost of Sales $56,000 $60,000 $64,000 $68,000 $73,000 $77,000 Personnel Expenses $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 Maintenance & Repair $61,000 $65,000 $70,000 $74,000 $79,000 $83,000 Other Operating $138,000 $148,000 $157,000 $168,000 $179,000 $189,000 Insurance $21,000 $21,000 $21,000 $21,000 $21,000 $21,000 Franchise Fee $23,000 $25,000 $26,000 $28,000 $30,000 $32,000 Annual Lease $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 Total Operating Expenses $421,000 $439,000 $459,000 $480,000 $502,000 $522,000 Income Taxes (Federal & State) $30,000 $39,000 $50,000 $61,000 $72,000 $82,000 Depreciation $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 Interest $43,000 $43,000 $43,000 $43,000 $43,000 $43,000 Total Expenses $510,000 $538,000 $568,000 $600,000 $633,000 $663,000 EBITDA $157,000 $177,000 $198,000 $221,000 $244,000 $266,000 Net Profit $67,000 $78,000 $89,000 $101,000 $113,000 $124,000 Net Profit (% of Revenues) 11.7% 12.7% 13.6% 14.4% 15.2% 15.8%

Cash-Flow Analysis The cash-flow analysis for the RV Park is presented in Table 7-7, including estimates of annual and cumulative cash flows at select years over the contract term. By the end of the contract term, estimated total cumulative cash flow is estimated to be $3.27 million.

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Table 7-7. Cash-Flow Analysis for RV Park Year 0 5 10 15 20 25 30 Cash In Beginning Cash $0 $82,000 $511,000 $995,000 $1,537,000 $2,140,000 $2,804,000 Sales $0 $593,000 $632,000 $675,000 $720,000 $764,000 $812,000 Other Revenues $0 $0 $0 $0 $0 $0 $0 Sale of Assets $0 $0 $0 $0 $0 $0 $328,000 Total Available Cash $0 $675,000 $1,143,000 $1,669,000 $2,257,000 $2,904,000 $3,944,000 Cash Out Salaries $0 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 Other Operating Expenses $0 $308,000 $327,000 $348,000 $369,000 $391,000 $414,000 Loan Payments $18,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 Capital Expenditures $205,000 $0 $0 $0 $0 $0 $0 Tax Payments $0 $34,000 $43,000 $54,000 $65,000 $76,000 $88,000 Total Cash Out $224,000 $511,000 $540,000 $571,000 $604,000 $636,000 $671,000 Annual Cash Flow ($224,000) $82,000 $92,000 $104,000 $116,000 $128,000 $469,000 Cumulative Cash Flow ($224,000) $163,000 $603,000 $1,098,000 $1,653,000 $2,268,000 $3,273,000

Note: Values represent specific points in time; a complete year-by-year cash-flow analysis is available in Appendix D

Financial Summary46 The results of the financial feasibility evaluation for the RV Park are presented in Table 7-8. Over the contract term, EBIDTA is projected to average about $211,000 annually and total $6.33 million. Further, net profits are estimated to average $96,000 per year, and cumulatively total $2.87 million. In net present value terms, annualized and cumulative cash flows are an estimated $87,000 and $574,000 respectively, and the estimated ROI is 69.9 percent and IRR is 35.4 percent. Based on these parameters, the financial feasibility evaluation indicates that an RV Park would likely be financially viable over the long term.

Table 7-8. Results of the Financial Feasibility Analysis for RV Park Financial Metric Annual Average Cumulative EBIDTA $211,000 $6,329,000 Net Profit ($) $96,000 $2,872,000 Net Present Value of Cash Flow $87,000 $574,000 ROI -- 69.9% IRR -- 35.4%

7.3.4 Equestrian Stables The equestrian riding stables would be integrated into the proposed equestrian staging area planned at the Peoria WMA. Services would be limited to horseback riding rentals; no boarding services would be offered. A range of

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day-rides would be available, ranging from one-hour rides to longer specialty rides.

Capital Investment Costs Estimated capital investment costs for the equestrian riding stables are presented in Table 7-9. A limited amount of cost savings is expected based on the integration of concessions services with the proposed equestrian staging area planned at the Peoria WMA; however, the prospective concessionaire would likely still incur some level of infrastructure development costs, such as the extension of electrical utilities to the site. In total, capital investment costs, including horses and tack, for the equestrian concession are estimated at $488,000.

Table 7-9. Capital Investment Costs for Equestrian Riding Stables

Category Cost ($) Planning and Design $17,000 Site Clearing & Preparation $60,000 Vertical Building Costs $239,000 Miscellaneous Costs (including horses and tack) $121,000 Power Connection $50,000 Parking Space Development $0 Total $488,000

Operating Revenues and Costs Table 7-10 presents operating revenues and expenses for the equestrian stables. Revenues are expected to increase over time as more people visit the lake and engage in horseback riding opportunities at the lake. Total average annual operating revenues at the equestrian stables would range between $332,000 and $443,000 per year, with the majority of revenues expected during the peak season. The assumptions behind revenue projections for equestrian riding stables are outlined in Appendix C (Table C-4). Over the contract term, average annual operating expenses range between $279,000 and $308,000 per year, including average annual government payments of $14,000 to $19,000 per year. The equestrian stable is projected to earn annual average profits ranging from 2.6 percent in years 1-5 to 14.6 percent in years 26-30.

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Table 7-10. Operating Revenues and Expenses for Equestrian Riding Stables Average Annual Values Years 1-5 Years 6-10 Years 11-15 Years 16-20 Years 21-25 Years 26-30 REVENUES BY OPERATING DEPARTMENT Peak Rental $258,000 $275,000 $293,000 $313,000 $333,000 $351,000 Off-Peak Rental $45,000 $48,000 $52,000 $55,000 $58,000 $62,000 Special Events $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 Total Operating Revenues $332,000 $353,000 $374,000 $397,000 $421,000 $443,000 EXPENSES

Hay $13,000 $14,000 $15,000 $16,000 $17,000 $18,000 Bedding $6,000 $6,000 $6,000 $7,000 $7,000 $8,000 Stall Cleaning $17,000 $18,000 $19,000 $20,000 $21,000 $23,000 Vet / Farrier $3,000 $3,000 $3,000 $3,000 $3,000 $4,000 Insurance $4,000 $5,000 $5,000 $5,000 $5,000 $6,000 Manure Removal $5,000 $5,000 $6,000 $6,000 $6,000 $7,000 Telephone $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 Utilities $13,000 $14,000 $15,000 $16,000 $17,000 $18,000 Office $1,000 $1,000 $1,000 $1,000 $2,000 $2,000 Repair & Maintenance $5,000 $5,000 $6,000 $6,000 $6,000 $7,000 Personnel Costs $198,000 $198,000 $198,000 $198,000 $198,000 $198,000 Franchise Fee $13,000 $14,000 $15,000 $16,000 $17,000 $18,000 Annual Lease $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 Total Operating Expenses $279,000 $285,000 $290,000 $296,000 $303,000 $308,000 Income Taxes (Federal & State) $3,000 $6,000 $10,000 $15,000 $21,000 $28,000 Depreciation $13,000 $13,000 $13,000 $13,000 $13,000 $13,000 Interest $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 Total Expenses $324,000 $333,000 $342,000 $353,000 $365,000 $378,000 EBITDA $53,000 $68,000 $84,000 $101,000 $118,000 $134,000 Net Profit $9,000 $20,000 $32,000 $44,000 $55,000 $65,000 Net Profit (% of Revenues) 2.6% 5.7% 8.6% 11.1% 13.2% 14.6%

Cash-Flow Analysis As shown in Table 7-11, estimated cash holding at the end of the contract term for the equestrian riding stable is an estimated $1.43 million.

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Table 7-11. Cash-Flow Analysis for Equestrian Riding Stables Year 0 5 10 15 20 25 30 Cash In Beginning Cash $0 ($81,000) $53,000 $246,000 $487,000 $798,000 $1,160,000 Sales $0 $340,000 $361,000 $383,000 $407,000 $430,000 $455,000 Other Revenues $0 $0 $0 $0 $0 $0 $0 Sale of Assets $0 $0 $0 $0 $0 $0 $195,000 Total Available Cash $0 $259,000 $414,000 $629,000 $893,000 $1,228,000 $1,810,000 Cash Out Salaries $0 $198,000 $198,000 $198,000 $198,000 $198,000 $198,000 Other Operating Expenses $0 $84,000 $89,000 $95,000 $101,000 $107,000 $114,000 Loan Payments $12,000 $33,000 $33,000 $33,000 $33,000 $33,000 $33,000 Capital Expenditures $135,000 $0 $0 $0 $0 $0 $0 Tax Payments $0 $4,000 $8,000 $12,000 $17,000 $24,000 $32,000 Total Cash Out $147,000 $318,000 $327,000 $337,000 $349,000 $362,000 $376,000 Annual Cash Flow ($147,000) $22,000 $34,000 $46,000 $58,000 $68,000 $274,000 Cumulative Cash Flow ($147,000) ($59,000) $86,000 $292,000 $544,000 $866,000 $1,434,000

Note: Values represent specific points in time; a complete year-by-year cash-flow analysis is available in Appendix D

Financial Summary46 As shown in Table 7-12, the financial feasibility evaluation indicates that an equestrian riding stable would earn an average EBITDA of $93,000 and net profit of $38,000 on an annual basis. In addition, the net present value of cash flows is $5,000 annually and $30,000 over the contract term. Further, the estimated ROI is 5.6 percent and IRR is 17.4 percent. Based on these parameters, the financial feasibility evaluation indicates that an equestrian riding stable would likely be financially viable over the long term.

Table 7-12. Results of the Financial Feasibility Analysis for Equestrian Riding Stables Financial Metric Annual Average Cumulative EBIDTA $93,000 $2,798,000 Net Profit ($) $38,000 $1,131,000 Net Present Value of Cash Flow $5,000 $30,000 ROI -- 5.6% IRR -- 17.4%

7-17 FINAL – April 2011 New Melones Lake Commercial Services Study & Financial Feasibility Evaluation

7.4 Sensitivity Analyses of Financial Feasibility

The key assumptions utilized in this financial feasibility evaluation have a direct bearing on the metrics used to determine the financial feasibility of proposed concessions at New Melones Lake. Table 7-13 (marina services), Table 7-14 (RV park), and Table 7-15 (equestrian stables) show how these financial metrics vary with changes in key assumptions. In addition, Table 7-16 presents additional analyses related to the financial viability of marina facilities based on different assumptions on capital costs.

7.4.1 Variation in Operating Assumptions The following tables illustrate changes in financial metrics based on variations in operating assumptions.

Table 7-13. Sensitivity Analysis of Financial Feasibility for Marina Services 1,2 EBITDA Net Profit Key Assumption (Annual Average) (Annual Average) ROI IRR Visitation Levels3 0% $1,056,000 $89,000 7.3% 20.2% 1.1 to 1.3% $1,284,000 $212,000 10.6% 21.8% 3% $1,689,000 $442,000 16.2% 24.0% Length of Season Year-Round $1,284,000 $212,000 10.6% 21.8% Peak Season Only $1,234,000 $185,000 8.9% 20.7% Rates4 Existing Rates $1,284,000 $212,000 10.6% 21.8% Contract Term 20 $800,000 $110,000 12.1% 22.4% 30 $1,284,000 $212,000 10.6% 21.8% 40 $1,284,000 $212,000 11.4% 21.9% Capital Investment Concessionaire (100 percent) $1,284,000 $212,000 10.6% 21.8% Rate of Return on Capital 10% $1,284,000 $212,000 27.8% 21.8% 15% $1,284,000 $212,000 10.6% 21.8% 20% $1,284,000 $212,000 2.1% 21.8% Franchise Fee 2% $1,344,000 $245,000 12.6% 23.1% 4% $1,284,000 $212,000 10.6% 21.8% 10% $1,104,000 $112,000 4.0% 17.6% Occupancy Fee $0 $1,285,000 $213,000 10.7% 21.8% $1,000 $1,284,000 $212,000 10.6% 21.8% $5,000 $1,280,000 $210,000 10.5% 21.7% 1/ Values in bold represent baseline conditions 2/ The sensitivity analysis shows variation in key parameters holding all other parameters at baseline levels 3/ Values represent change in annual visitation levels 4/ No seasonal variation in rates was evaluated

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Table 7-14. Sensitivity Analysis of Financial Feasibility for RV Park 1,2 EBITDA Net Profit (Annual (Annual Key Assumption Average) Average) ROI IRR Visitation Levels3 0% $149,000 $63,000 59.0% 32.7% 1.1 to 1.3% $211,000 $96,000 69.9% 35.4% 3% $320,000 $154,000 86.5% 38.5% Length of Season Year-Round $211,000 $96,000 69.9% 35.4% Peak Season Only $139,000 $56,000 42.0% 21.8% Rates4 Existing Rates $211,000 $96,000 69.9% 35.4% Contract Term 20 $126,000 $56,000 68.1% 35.4% 30 $211,000 $96,000 69.9% 35.4% 40 $211,000 $96,000 71.2% 35.4% Capital Investment Concessionaire (100 percent) $211,000 $96,000 69.9% 35.4% Rate of Return on Capital 10% $211,000 $96,000 106.9% 35.4% 15% $211,000 $96,000 69.9% 35.4% 20% $211,000 $96,000 50.9% 35.4% Franchise Fee 2% $225,000 $103,000 75.1% 38.0% 4% $211,000 $96,000 69.9% 35.4% 10% $170,000 $74,000 53.2% 26.9% Occupancy Fee $0 $212,000 $96,000 70.3% 35.6% $1,000 $211,000 $96,000 69.9% 35.4% $5,000 $207,000 $94,000 68.2% 34.5% 1/ Values in bold represent baseline conditions 2/ The sensitivity analysis shows variation in key parameters holding all other parameters at baseline levels 3/ Values represent change in annual visitation levels 4/ No seasonal variation in rates was evaluated

7-19 FINAL – April 2011 New Melones Lake Commercial Services Study & Financial Feasibility Evaluation

Table 7-15. Sensitivity Analysis of Financial Feasibility for Equestrian Riding Stables 1,2 EBITDA Net Profit (Annual (Annual Key Assumption Average) Average) ROI IRR 3 Visitation Levels 0% $47,000 $4,000 -9.4% 9.1% 1.1 to 1.3% $93,000 $38,000 5.6% 17.4% 3% $175,000 $83,000 25.5% 23.8% Length of Season Year-Round $93,000 $38,000 5.6% 17.4% Peak Season Only $152,000 $74,000 51.5% 44.4% Rates4 Existing Rates $93,000 $38,000 5.6% 17.4% Contract Term 20 $51,000 $18,000 4.6% 17.2% 30 $93,000 $38,000 5.6% 17.4% 40 $93,000 $38,000 6.6% 17.7% Capital Investment Concessionaire (100 percent) $93,000 $38,000 5.6% 17.4% Rate of Return on Capital 10% $93,000 $38,000 27.4% 17.4% 15% $93,000 $38,000 5.6% 17.4% 20% $93,000 $38,000 -4.0% 17.4% Franchise Fee 2% $101,000 $43,000 11.1% 20.0% 4% $93,000 $38,000 5.6% 17.4% 10% $70,000 $21,000 -12.3% 10.2% Occupancy Fee $0 $94,000 $38,000 6.4% 17.8% $1,000 $93,000 $38,000 5.6% 17.4% $5,000 $89,000 $35,000 2.4% 16.0% 1/ Values in bold represent baseline conditions 2/ The sensitivity analysis shows variation in key parameters holding all other parameters at baseline levels 3/ Values represent change in annual visitation levels 4/ No seasonal variation in rates was evaluated

7.4.2 Variation in Capital Cost Estimates Table 7-16 presents changes in financial metrics based on variations in capital costs (for the marina only). Based on the ROI and IRR, the break-even point (ROI = zero, IRR = 15%) is roughly $6.98 million.

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Table 7-16. Sensitivity Analysis of Financial Feasibility for Marina Services (Capital Costs Only) 1,2 EBITDA Net Profit (Annual (Annual Capital Cost Estimate Average) Average) ROI IRR $4,000,000 $1,284,000 $244,000 15.2% 24.7% $4,732,505 $1,284,000 $212,000 10.6% 21.8% $6,000,000 $1,284,000 $158,000 4.3% 17.8% $8,000,000 $1,284,000 $62,000 -4.5% 12.3% $10,000,000 $1,284,000 -$56,000 -11.9% 7.9% 1/ Values in bold represent baseline conditions 2/ The sensitivity analysis shows variation in key parameters holding all other parameters at baseline levels

7-21 FINAL – April 2011

Chapter 8 Summary and Recommendations

Chapter 8 Summary and Recommendations

8.1 Summary of Information

New Melones Lake is a popular recreation destination in the Sierra Nevada foothills, with use levels averaging over 700,000 visitors annually. With recreation playing such a large role in the management of the reservoir and adjacent lands, the role of commercial services is an important planning issue that has been identified in the New Melones Lake RMP/EIS. The goal of this CSS/FEE has been to clearly define the various types of commercial services that are necessary and appropriate for the reservoir based on a systematic review of recreation supply and demand in the region, as well as the site-specific characteristics of the lake. In addition, this study evaluates the financial feasibility of prospective commercial services, focusing on services provided under concessions contracts.

8.2 Recommendations for Commercial Services at New Melones Lake

8.2.1 Existing Commercial Services There is strong demand for marina services at New Melones Lake. However, the existing marina is located in an area susceptible to storm-related damages. Further, an engineering review of the existing marina indicates that many facilities are nearing the end of their useful life. Accordingly, it is recommended that the existing marina facilities be closed and removed from the lake. It is further recommended that new marina facilities be developed to replace existing facilities.

8.2.2 New Commercial Services There are a wide range of commercial services recommended at New Melones Lake. These services can be organized into two categories – concessions and services authorized under special-use permits. It is recommended that the following services be provided under concessions contracts: (1) marina services (including mooring and berth rentals, houseboat rentals, other motorized watercraft rentals, dry boat storage, boat repair, and prepared food service); (2) RV Park; and (3) an equestrian riding stable. In addition, it is recommended that the following uses be managed under special use permits: (1) whitewater rafting and (2) fishing guide services. As described in Chapter 3 and Chapter 4, there is a demonstrated demand for these commercial services at New Melones Lake. In addition, the concessions listed above have been subject to a comprehensive

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financial feasibility evaluation, which, based on planning-level estimates, indicates that each of these concessions is financially viable over the long run.

8.2.3 Location of Commercial Services The location of proposed commercial services has been considered at a planning level. Chapter 5 presents a general review of resource opportunities and constraints throughout the New Melones Lake planning area in an effort to show areas that are suitable (or not suitable) for future development of commercial services; however, this analysis does not consider a number of important factors, such as the location of cultural resources, It is recommended that the marina be relocated to a more conducive area on the lake, but should remain in one of the developed recreation areas, Glory Hole Recreation Area or Tuttletown Recreation Area. The exact location of the marina will be dependent on a number of physical factors, which were outside the purview of this study. It is recommended that a comprehensive analysis of marina location be prepared to determine the optimal location of marina facilities. The proposed location of the RV Park is in the Tuttletown Recreation Area. This location was originally envisioned for RV facilities in the 1976 Master Plan and represents a centralized location that experiences high use levels and already offered camping opportunities. Finally, it is recommended that the equestrian riding stable be located in the Peoria WMA. This location is considered most suitable based on the potential to integrate the riding stable with the proposed equestrian staging area planned at the Peoria WMA.

8.2.4 Seasonal Considerations The length of the operating season for proposed commercial services is an important management issue. It also has a direct bearing on the financial performance of commercial operations. New Melones Lake experiences high visitation levels, which are concentrated in the peak summer months (approximately 62 percent to total annual visitation). However, there still remains substantial visitation during the off-season, with visitors likely participating in different set of recreation activities. Accordingly, it is recommended that the proposed marina and RV Park be operated on a year- round basis to provide maximum level of service to the entire visitor base. This recommendation is further supported by the financial feasibility evaluation. However, flexibility should be provided to prospective concessionaires operating these facilities to adjust services provided and hours of operation to better match services to demand levels. For the equestrian riding stable, the demand for horseback riding rentals would likely be very low during the off- peak periods, thereby suggesting that these services be provided on a seasonal basis. It is recommended that prospective concessionaires be provided the option for seasonal operation of the equestrian riding stable. For services provided under special use permit, such as whitewater rafting and fishing guides, these opportunities should be considered on a case-by-case basis.

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8.2.5 Management of Commercial Services The management of commercial services follows two paths. First, the decision must be made to manage prospective commercial services under concessions contracts or special use permits. It is recommended that services requiring substantial capital investment, including all marina services, RV Park, and equestrian riding stable be managed under concessions contract, while whitewater rafting and fishing guide services continue to be managed under special use permits. Second, there is the issue of whether Reclamation should manage commercial services at the lake. Because Reclamation is responsible for management of recreation at the lake, it is recommended that they continue to be responsible for management of related commercial services that support recreation at the lake. If recreation management is transferred at some point in the future to a managing partner, such as California State Parks, BLM or local counties, then the management role for commercial services should be re- evaluated.

8-3 FINAL – April 2011

Chapter 9 References

Chapter 9 References

Aukerman, Haas & Associates. 2008. New Melones Lake, Water Recreation Opportunity Spectrum, Inventory and Management Alternatives. Prepared for the Bureau of Reclamation and California Department of Parks and Recreation. October 2008.

California Department of Finance, 2007. Population Projections for California and Its Counties 2000-2050. Sacramento, California.

California Department of Fish and Game. 2009. Data on Sport Fishing Licenses (as of October 31, 2009). Available at: http://www.dfg.ca.gov/licensing/pdffiles/sf_items_10yr.pdf

California State Parks. 2005. Parks and Recreation Trends in California. California Department of Parks and Recreation, Planning Division. Sacramento, CA.

California State Parks. 2009. California Outdoor Recreation Plan. California Department of Parks and Recreation, Planning Division. Sacramento, CA.

Cassady J. and Calhoun F. 1995. California Whitewater: A Guide to the Rivers. North Fork Press, Berkeley CA.

Cordell, H. K; C. Betz, M.J. Bowker, D. English, B.K. Donald, S.H. Mou, J.C. Bergstrom, R.J. Teasley, M.A. Tarrant, J Loomis. 1999. Outdoor recreation in American life: A national assessment of demand and supply trends. Sagamore Press, Champaign, IL.

Cordell, H. K. 2008. The latest on trends in nature-based outdoor recreation. Forest History Today, Durham N.C. Spring 2008. 4-10.

Hass, G.E. 2003. A Visitor Capacity Analysis, New Melones Lake Resource Area. Prepared for Department of the Interior, Bureau of Reclamation, through Aukerman, Haas, and Associates, LLC. June 6, 2003.

Han, Mike. 2009. Personal communication between Mike Han, General Manager, Water Resorts, Inc. and Steve Pavich, ENTRIX, Inc., on December 8, 2009.

Manning, Robert E. 1999. Studies in Outdoor Recreation: Search and Research for Satisfaction. Second Edition. Oregon State University Press.

Wendt Tyler. 1999. Personal communication between Tyler Wendt, OARS, and Bill Spain, ENTRIX, Inc., on March 8, 2010.

9-1 FINAL – April 2011 New Melones Lake Commercial Services Study & Financial Feasibility Evaluation

State of California, Department of Water Resources. 2001. Comparative Inventory of Recreation Facilities at California's Largest Reservoirs, 2000. Published December 2001.

U.S. Bureau of Reclamation. 1995. New Melones Lake Draft Resource Management Plan

U.S. Bureau of Reclamation. 1996. New Melones Lake Revised Cave Management Plan.

U.S. Bureau of Reclamation. 1997. New Melones Lake Draft Vegetation Management Plan.

U.S. Bureau of Reclamation. 2005. Reclamation Concession Management Guidelines. April 2005.

U.S. Bureau of Reclamation. 2006. Draft New Melones Lake Fire Management Plan.

U.S. Bureau of Reclamation, 2007a. New Melones Lake Area Resource Management Plan and Environmental Impact Statement Final Scoping Summary Report. Available at: (http://www.usbr.gov/mp/ccao/newmelones/RMP/docs/NM- FinalScoping%206-7-07.pdf).

U.S. Bureau of Reclamation. 2007b. New Melones Lake Area Draft Resource Management Plan and Environmental Impact Statement, Resource Inventory Report. August 2007.

U.S. Bureau of Reclamation. 2007c. Final Peoria Wildlife Management Area Environmental Assessment (EA).

U.S. Bureau of Reclamation, 2008a. New Melones Lake Area Resource Management Plan and Environmental Impact Statement Chapters 1-3 Public Open House Summary Report. Available at: (http://www.usbr.gov/mp/ccao/newmelones/RMP/docs/Chap1- 3RptSum.pdf).

U.S. Bureau of Reclamation, 2008b. On-Site Survey of Recreational Users and Telephone Survey of Area Residents for New Melones Lake 2007. Available at: (http://www.usbr.gov/mp/ccao/newmelones/RMP/docs/NM_FinalRecRe portComplete.pdf).

U.S. Bureau of Reclamation. 2008c. A Report of Findings for the On-Site Survey of Recreation Users and Telephone Survey of Area Residents for New Melones Lake, 2007. Prepared for Tetra Tech, Inc. by Kathleen

9-2 FINAL – April 2011 Chapter 9 References

Andereck, PhD and Richard C. Knopf, PhD, Professors, Recreation and Tourism Management, College of Human Services, Arizona State University, April 2008.

U.S. Bureau of Reclamation. 2009a. New Melones Lake Area Draft Resource Management Plan and Environmental Impact Statement. October 2009

U.S. Bureau of Reclamation, 2009b, Approved Rates (letter and spreadsheet), dated December 5, 2008, sent to ENTRIX, Inc. on December 10, 2009

U.S. Bureau of Reclamation. 2009c. Recreation visitation data compiled for New Melones Lake. Provided by Jeff Laird, Chief Ranger, New Melones Lake to Steve Pavich, ENTRIX. Inc.

U.S. Bureau of Reclamation. 2009d. Recreation occupancy data (estimates provided by field staff that have knowledge of recreation use at New Melones Lake). Provided by Jeff Laird, Chief Ranger, New Melones Lake to Steve Pavich, ENTRIX. Inc.

U.S. Bureau of Reclamation. 2011. New Melones Lake Area Draft Marina Siting Plan. April 2011.

9-3 FINAL – April 2011

Appendix A Reclamation Guidance on Concessions Management Appendix A Reclamation Guidance on Concessions Management

 Reclamation Manual Policy LND P02 (Concessions Management)  Reclamation Manual Directives and Standards LND 04-01 (Concessions Management by Reclamation)  LND 04-02 (Concessions Management by Non-Federal Partners

A-1 FINAL – April 2010

LND P02

Reclamation Manual Policy

Subject: Concessions Management

Purpose: Sets forth the policy for planning, development, management, and operation of concessions at Reclamation projects.

Authority: Reclamation Act of 1902, as amended and supplemented; the Reclamation Project Act of 1939; and the Federal Water Project Recreation Act of 1965, as amended.

Contact: Land, Recreation, and Cultural Resources Office, D-5300

1. Concessions Management Policy.

A. Stewardship. Reclamation and its managing partners will ensure that concessions are planned, developed, and managed to meet public needs, are compatible with the natural and cultural resources, and provide a variety of services which are consistent with authorized project purposes.

B. Authorization of Concessions. Based on the principles contained in this policy, Reclamation will authorize concessions which establish or continue to provide necessary and appropriate facilities and services.

2. Definition.

A. Concession. A concession is a non-Federal commercial business that supports appropriate public recreation uses and provides facilities, goods, or services for which revenues are collected. A concession involves the use of the Federal estate and usually involves the development of real property improvements.

3. Concessions Principles. The following principles guide the planning, development, and management of concessions:

A. Concessions will provide quality recreation facilities and services accessible to persons with disabilities, and appropriate visitor goods and services at reasonable rates.

B. Concession operations will provide for the protection, conservation, and preservation of natural, historical, and cultural resources.

C. Commercial facilities and services will be planned and developed through a commercial services planning and public involvement process, in cooperation with other public agencies.

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Reclamation Manual Policy

D. Concessionaires will be provided with opportunities for a reasonable profit and may be compensated for Reclamation-approved improvements that will remain the property of the United States.

E. Reclamation will ensure fair competition in the awarding of concessions contracts and will not allow preferential rights of renewal.

F. Exclusive use of the Federal estate will not be allowed and existing exclusive use will be removed as soon as possible.

G. Concessions will comply with applicable Federal, State, and local laws.

4. Supporting Directives and Standards and Guidelines. Implementation of the Concessions Management Policy is accomplished through the use of the Reclamation Manual Directives and Standards, and Guidelines.

! Concessions Management by the Bureau of Reclamation, LND 04-01.

! Concessions Management by Non-Federal Partners, LND 04-02.

! Concessions Management Guidelines.

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Subject: Concessions Management by Reclamation1

Purpose: Sets forth the directives and standards for planning, development, and management of concessions at Reclamation projects.

Authority: Reclamation Act of 1902, as amended and supplemented; the Reclamation Project Act of 1939; and the Federal Water Project Recreation Act of 1965, as amended.

Contact: Land, Recreation, and Cultural Resources Office, D-5300

1. Definitions.

A. Concession. A concession is a non-Federal commercial business that supports appropriate public recreation uses and provides facilities, goods, or services for which revenues are collected. A concession involves the use of the Federal estate and usually involves the development of real property improvements.

B. Cooperating Association. A cooperating association is a nonprofit organization. It is a Federal 501(c) tax-exempt entity incorporated within the State in which it operates, and it is governed by a volunteer board of directors. Cooperating associations assist in enhancing interpretive programs, providing visitor information, funding research, and supporting various resource themes.

C. Exclusive Use. Exclusive use is any use that excludes other appropriate public recreation use or users for extended periods of time. Exclusive use includes, but is not limited to, boat docks, cabins, trailers, manufactured or mobile homes, structures, roads, or other amenities that are determined by Reclamation to be exclusive use.

D. Federal Estate. The Federal land and water areas under the primary jurisdiction of the Department of the Interior, Bureau of Reclamation.

E. Fixed Assets. Fixed assets are any structures, fixtures, or capital improvements permanently attached to the Federal estate.

F. Improvement. An addition to real property that increases its value or utility or that enhances its appearance.

1 The following directives and standards apply to concessions managed directly by Reclamation. Separate directives and standards address concessions managed by non-Federal partners.

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G. Incidental Revenues. Incidental revenues are generally defined as those revenues generated from the use of Reclamation’s project lands and facilities that are incidental to authorized project purposes. Although recreation and concession facilities are authorized project purposes, it has been determined that revenues generated from the use of the Federal estate by concessionaires are to be credited as incidental revenues.

H. Total Benefits to the Government. Total benefits include:

(1) Direct Returns. These are revenues generated by authorized concession contracts and paid directly to the United States Treasury and credited in accordance with Reclamation Manual (RM), Crediting of Incidental Revenues, PEC 03-01.

(2) Direct Benefits. These are fees paid into a contractually designated special account for resource and capital improvements that directly benefit the public in the area of operations where the fees are collected.

(3) Indirect Benefits. These are services performed by the concessionaire that benefit the public or improvements made to the Federal estate by the concessionaire.

2. Existing Concession Contracts.

A. Compliance. Existing concession contracts must be brought into compliance with the Concessions Management Policy and Directives and Standards at the first legal opportunity, for example, if the contract is amended. If a concession contract expires or is terminated because of contract default or for other reasons, any subsequent concession contract must comply with the Concessions Policy and Directives and Standards.

B. Unusual Circumstances. In the event that unusual circumstances prevent Reclamation from issuing a new contract in a timely manner, a one-time, temporary contract may be issued. The temporary contract must comply with the Concessions Management Policy and Directives and Standards and may be issued for a period not to exceed 2 years.

3. Concessions Planning.

A. General. Before issuing a concession prospectus and Request for Proposal (RFP), Reclamation will complete a formal commercial services plan and financial feasibility evaluation.

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(1) Commercial Services Plan. The commercial services plan can be an addendum to a resource management plan or similar planning document. If there is no other planning document, the commercial services plan may stand on its own. At a minimum, the commercial services plan must determine the number of concessions necessary to meet the public needs, the type of facilities and services to be provided, the financial feasibility of the concession(s), and the location(s) appropriate for commercial activities. The complexity of commercial services plans will vary according to location, past visitor use, anticipated revenues, and other factors.

(2) Financial Feasiblity Evaluation. The financial feasibility evaluation, included in the commercial services plan, will include, at a minimum, a documented determination of the financial viability of the proposed concession operation, including, the estimated fees to be returned to the Government, a justification for the proposed length of the term of the concession contract and the underlying assumptions regarding concessionaire capital investment in the concession.

(3) Planning for New Concessions Contracts. It is essential that area and regional offices allow adequate time to complete the commercial services planning process, develop an RFP and contract, and receive the Commissioner’s Office review and approval of the RFP and contract. In some cases, the planning for new concession contracts(s) must begin several years in advance of the date anticipated the contract(s) will be awarded.

B. Commercial Services Plan. Decisions to contract for concessions must be based on the results of the commercial services planning process, which will include public involvement, financial feasibility evaluation, and environmental analysis. During the planning process, the following criteria will be applied to determine appropriate facilities and services:

(1) Facilities and services must be necessary and appropriate for a broad spectrum of public use and enjoyment.

(2) Commercial facilities must not be developed or expanded on the Federal estate if existing facilities, on or off the Federal estate, adequately meet current and projected needs.

(3) Facilities and services must reflect the general public’s needs rather than the desires of a particular individual or group. Existing concessionaires may provide input through the public involvement process.

(4) The financial feasibility evaluation must consider the concession’s:

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(a) Gross revenues (receipts) by operating department (lodging, food, and beverage).

(b) Operating expenses:

(i) Direct expenses by operating department (including labor and cost-of- goods sold).

(ii) Unallocated expenses (including utilities and repair and maintenance).

(iii) General and administrative expenses (including overhead, officer salaries, office supplies, and travel).

(iv) Fixed expenses (including rent, interest, depreciation, and reserve accounts).

(v) Franchise fees.

(c) Earnings before interest, depreciation, taxes, and amortization. (EBIDTA is a standard accounting value representing net operating income)

(d) Capital investment costs:

(i) Working capital.

(ii) Furniture, fixtures, and equipment.

(iii) Ongoing capital replacement.

(iv) New facility development costs.

(e) Cash flow analysis.

(f) Other appropriate factors that influence the concession’s business opportunity (including length of season, rates, visitation, inflation, cost of capital, and appropriate target rate-of-return to concessionaire).

(5) Facilities and services must be compatible with Reclamation project purposes.

(6) Facilities, services, or sites considered to be exclusive use will not be allowed and should not be considered as a part of any commercial services planning alternative. Existing exclusive use facilities, services, and sites must be removed when a contract expires or, if possible, sooner.

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(7) Potential impacts to natural and cultural resources must be considered in the development of facilities and services.

(8) Facilities must be harmonious in form, line, color, and texture with the surrounding landscape.

(9) The planning process will consider whether existing concession facilities should be relocated because: (a) they would serve the public better at a different location, (b) they are situated in an area that is topographically limited (steep slopes, soils subject to erosion, limited space for expansion, or the site cannot accommodate the demand) and cannot provide the best public services and facilities, or (c) the financial feasibility evaluation determines that combining one or more existing concessions would create a more financially stable concession.

(10) If existing fixed assets are proposed to be retained as a part of any new concession operation, they must first be formally evaluated to determine if their existing condition and useful life is sufficient to last through the duration of any new contract. If the evaluation determines that any fixed asset would have to have significant maintenance or would need to be replaced during the term of the new contract, then the fixed asset must be removed prior to issuing a new contract.

(11) Concession contracts and operations must comply with all applicable laws, rules, regulations, Executive Orders, and policies.

4. Concessions Contracting.

A. General Application. These directives and standards will apply to existing concessions contracts only if agreed to by both Reclamation and the concessionaire. Existing contracts may not be renewed, nor can the length of the term be extended. Existing contracts that are amended or modified within the current term must adhere to these Concessions Management Directives and Standards. New or replacement contracts will be awarded on a fully competitive basis.

B. Request for Proposals (RFP). An RFP will be issued to actively solicit offers from interested parties. To allow for a wide distribution, the RFP will be published in the appropriate media and the following approach will be applied:

(1) Fair Competition. To ensure fair competition before and during the RFP process, meetings to discuss the RFP with existing or potential concessionaires or other outside parties must not be conducted. It is appropriate to have meetings with existing concessionaires to deal with ongoing operational or

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contractual issues and programs. The RFP should include a schedule of meetings in which all interested parties can discuss requirements of the RFP. Other meetings requested by individual interested parties must be declined.

(2) Equal Access to Information. All information must be equally available to all interested parties during the RFP process.

(3) Written Explanation. Following release of an RFP, explanations or clarifications will be provided only in writing and must be sent to all parties who already have received the RFP and to any parties who are to receive it in the future.

(4) Existing Concessionaires. Existing concessionaires must respond to the RFP as a bidder to be considered for the new contract. If any existing concessionaire has a contract that includes a “Preferential Right of Renewal,” the RFP must state that, if selected, the concessionaire’s contract will be subject to all terms and conditions as outlined in the RFP. The RFP must also state how the preferential right of renewal will be applied in the bid process. No preferential right of renewal will be authorized for new, modified, or amended concession contracts.

C. Review of Proposals. A panel composed of Reclamation “subject matter experts” (e.g., financial, recreation, and concession experts) will be convened to review submitted proposals. If Reclamation desires, it may contract with external experts to analyze offers. The panel will forward a recommendation to the selecting official. The selecting official will provide selection criteria and a crediting plan to the panel.

D. Contract Terms and Conditions. The following items should be specifically addressed in concession contracts:

(1) Standard Contract Language. Reclamation’s standard concession contract language will be used to ensure compliance with all applicable laws, rules, regulations, Executive Orders, and Concessions Management Policy and Directives and Standards. Standard contract language can be found in the Concessions Management Guidelines. (See paragraph 5E.)

(2) Interim Operator. Reclamation may select an interim operator if a contract is not in place at the time the existing contract expires or is terminated. Interim contracts will generally follow the existing contract provisions; however, contract terms and conditions must be modified to reflect current policies and directives and standards. Reclamation may select the existing concessionaire as the interim operator if the existing concessionaire is performing in a

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satisfactory manner. The interim operation will not exceed 2 years. A new contract must be awarded as expeditiously as possible.

(3) Required and Authorized Visitor Services. Contracts must outline the specific types of services, facilities, and activities that a concessionaire is REQUIRED to offer. The contract should also specify any other services or activities the concessionaire is AUTHORIZED to offer. It must be clear that those required services are not optional and must be provided. Any service, facility, or activity not identified in either category is not authorized without a contract amendment or written authorization from the contracting official (Regional Director or delegate).

(4) Sale and Transfer. Concessionaires or parties holding interests in a concession contract may not sell, assign, or transfer their interests or a part of their interests to another party without the prior written approval of the contracting official (Regional Director or delegate). Concessionaires must complete and submit all sale and transfer information as required by Reclamation before approval of a sale or transfer of all or any portion of a concession operation will be considered.

(a) Proposed Transfer. A proposed transfer of interest is subject to the same evaluation process that is performed for a new concession contract. The Reclamation-designated official may choose not to approve a proposed sale or transfer or may choose to place conditions on the approval.

(b) Change of Original Contract Terms. Concession contracts will provide that the terms and conditions are subject to change by Reclamation before approval of a sale or transfer. The length of the term may be reduced but not extended.

(5) Default and Nonperformance. Clauses addressing default, penalty, and termination will be included in all concession contracts. The review and evaluation process will be critical to help determine if a concessionaire is in default or not meeting the terms of the contract. [See paragraph 4D(27).] The contract will also allow Reclamation to require a surety or performance bond at any time, collect penalties and administrative costs for default and nonperformance, and terminate the contract.

(6) Length of Term. The term of all contracts will be limited to the shortest period practical and will be based primarily on the investment required of the concessionaire, as determined through the financial feasibility evaluation. The term of a contract requiring minimal or no new capital investment should generally not exceed 5 years. When substantial investment is required, the

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term will be based on the financial feasibility evaluation to ensure that concessionaires receive a reasonable return on their investment. New contracts cannot contain renewal clauses.

(7) Subconcessions. Subconcessions are not permitted.

(8) Concessions Building and Improvement Program. All designs for construction must be approved by Reclamation and must comply with applicable environmental regulations and building code requirements, including those for accessibility and historic preservation. In areas where State or local construction standards are not available, Reclamation may provide appropriate standards. Where required and before construction, the concessionaire must obtain all required building permits from the local authorities. All the concessionaires’ facilities will be harmonious in form, line, color, and texture with the surrounding landscape.

(9) Environmental Compliance. Concession contracts will address all activities with potential environmental impacts resulting from the release of hazardous materials to the environment including, but not limited to, the following: pesticides, herbicides, sewage effluents, petroleum products, and liquid waste (gray water). Concessionaires are required to follow all applicable Federal, State, and local laws, rules, and regulations related to hazardous substance use, storage, and disposal. Application for and acquisition of all required certifications and permits are the responsibility of the concessionaire.

(10) Interpretation and Thematic Programs. Contracts should require concessionaires, to the extent possible, to support Reclamation’s educational efforts through such actions as developing interpretive and area thematic messages in printed material (menus, marketing, correspondence, etc.), using outdoor signs, and, as appropriate, developing formal programs.

(11) Operation and Maintenance Plan. Concessionaires will prepare an annual operation and maintenance plan, which must be approved by Reclamation. Concession contracts must clearly state what the plan will contain. Reclamation’s Concessions Management Guidelines provide a list of operation and maintenance items that should be considered for inclusion in the plan. (See paragraph 5E.)

(12) Preference for Renewal. Concession contracts will not include a preference right of renewal.

(13) Reimbursement for Fixed Assets Constructed by Concessionaires. Concession contracts will specify whether fixed assets located on the Federal

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estate by a concessionaire will remain on the Federal estate or be removed at the end of the contract.

(a) Assets That Remain With the United States. Title to all capital investments will be held by the United States and not the concessionaire. Concessionaires do not automatically have a right to compensation from the United States in fixed asset improvements upon contract expiration or termination. However, at the option of Reclamation, and when appropriated funds are available, Reclamation may purchase a concessionaires remaining assets that have not been amortized and the amount paid to the concessionaire will not exceed cost less depreciation.

(b) Approval of Improvements. Any new investment in fixed asset improvements by the concessionaire must be approved, in writing, by Reclamation before commencement of construction. This written approval will specify (i) the amount of money to be spent to construct or rehabilitate the fixed asset, (ii) the allowed depreciable life of the improvement (according to the IRS schedule), and (iii) the construction details and schedule.

(c) Assets That Remain to be Purchased by a New Concessionaire. Upon expiration, termination, or sale or transfer of a concession contract some fixed assets may not have been fully amortized. If Reclamation determines the fixed assets are still needed for the concession operation, the unamortized value must be purchased by the new concessionaire and based on the original cost less depreciation.

(14) Area of Operation. Each contract will authorize and define only the physical area necessary to conduct the business activities allowed by the contract. The contract must include a legal description and a detailed map. Concession boundaries will be surveyed by Reclamation and must be easy to recognize by the visiting public.

(15) Additional Facilities or Services. A concessionaire may request contract amendments for limited additional facilities or services that meet public needs and were not identified in the RFP. A major expansion of facilities or services is not permitted. Additional facilities or services are not allowed without advance approval by Reclamation.

(16) Total Benefits to the Government. Reclamation will determine and recover fair compensation, including direct returns and direct and indirect benefits, for the use, rights, and privileges granted under a concession contract. The

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concession contract will specify the direct returns and direct and indirect benefits.

(a) Thresholds. Targeted thresholds of total benefits will be developed to determine the optimal combination of payments. These will be used in advertisements, RFPs, and renegotiations to seek appropriate benefits to the Government and the public.

(b) Direct Returns (Disposition of Fees). The appropriate disposition of recreation or concession fees depends on the land status and authority used to collect the fees. Fees collected under the authority of the Land and Water Conservation Fund Act are to be deposited in the Recreation, Entrance, and User Fee Account, which is a special account for Reclamation established in the United States Treasury. For specific information, refer to the RM, Crediting of Incidental Revenues, PEC 03-01. Except as provided otherwise in a project specific authorization, fees collected pursuant to Reclamation law will be disposed of as follows:

(i) Fees generated by concessions or recreation activities on withdrawn project lands are deposited in the Reclamation Fund.

(ii) Fees generated by concessions or recreation activities on lands acquired for project purposes are deposited in the Reclamation Fund, to the credit of the project.

(17) Utility Services Provided by Reclamation. The value for utility services provided by Reclamation will be based on the recovery of full operating and replacement costs for utility capital investments and comparable utility rates. If the financial feasibility evaluation determines that it would not be feasible for the concessionaire to pay rates which would compensate Reclamation for its total capital and operating costs, Reclamation must determine the utility service rates that would be feasible and applied. Utility services include, but are not limited to, electricity, power, water, waste disposal, gas, and communication systems.

(18) Exclusive Use. Exclusive use facilities are not authorized in new concession contracts. If existing concession contracts are amended, a new provision must be included that requires exclusive use to be phased out as soon as possible, before the contract expires. A mandatory timetable for this phase out must be included in the amended contract. The concessionaire and a person hired to guard the concessionaire’s investment may reside on the Federal estate, with the written approval of the contracting officer.

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(19) Sale of Personal Property. The sale of personal property by anyone other than the concessionaire is prohibited on the Federal estate. Concessionaires will be permitted to sell their personal property on the Federal estate only to Reclamation or a succeeding concessionaire.

(20) Rates and Merchandise. Rates charged by concessionaires for all facilities, services, and merchandise will be based on charges for comparable facilities, services, facilities, and merchandise provided by the private sector in similar situations. Approved rates will ensure a fair return to the concessionaire and a reasonable charge to the public. Reclamation will approve such rates or rate schedules when the concessionaire proposes to change rates. Any rates in excess of comparable rates must be thoroughly justified and supported in writing by the concessionaire and approved by Reclamation.

(21) Concessions Safety Program. Concessionaires are responsible for providing and ensuring a safe and healthful environment for both the visiting public and employees by developing, implementing, and administering health, safety, and educational programs to ensure that concession areas are managed in compliance with Federal, State, and local laws, rules, and regulations.

(22) Insurance Program. Concessionaires must have an insurance policy that will indemnify the United States and meet applicable State requirements. All liability policies will provide that the insurance company will have no right of subrogation against the United States and will provide that the United States is named as an additional insured. Reclamation must be provided with a certificate of insurance by the insurance agent to confirm that the above requirements are met before development begins or operations commence. The concessionaire must also provide Reclamation with a copy of each insurance renewal certificate throughout the term of the concession contract. The Regional Director or delegate will establish a minimum insurance requirement based on the facilities and services offered by individual concessions.

(23) System of Recordkeeping. Concessionaires will complete Reclamation’s Annual Financial Report (AFR) form and provide any other financial information that may be requested. The annual financial reports will conform to the standard AFR form, without exception or modification.

(24) Food Sanitation. Concessionaires’ food services will comply with Federal, State, and local food handling and sanitation laws, rules, and regulations.

(25) Advertising and Signs. Use of the Reclamation seal, logo, or name must be approved by Reclamation before it is displayed in advertisements or on signs.

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Outdoor signs or other forms of advertising must not be displayed on the Federal estate without the approval of Reclamation.

(a) The Reclamation logo or name will be obvious at all entrances to all concessions.

(b) Concessionaires will be required to notify the public that they are authorized by Reclamation to conduct business on the Federal estate. All promotional material, regardless of media format (i.e., printed, electronic, broadcast), provided to the public by the concessionaire in connection with the services provided under the concession contract must be approved in writing by Reclamation. At a minimum, all such information will identify the concessionaire as an authorized concessionaire of the Bureau of Reclamation, Department of the Interior.

(26) Statistical Data. Concessionaires will furnish information as specified in Reclamation’s Recreation Use Data Report on an annual basis or as otherwise requested.

(27) Concessions Review and Evaluation. Reclamation’s Concessions Management Guidelines contain instructions on how to determine an appropriate rating and how to ensure that the concessionaire is in compliance with the terms of the contract. There are two types of review, the “local review” and the “external review.”

(a) Local Review. The local review will be conducted by the Reclamation office directly responsible for oversight of the concession. The local review will be conducted at least twice annually. One of the inspections must be conducted during the high use season. The combined reviews will determine the annual performance rating. The review will include, at a minimum, items listed in the Concessions Management Guidelines. The possible ratings are Satisfactory, Marginal, or Unsatisfactory. A copy of the completed review and rating will be sent to the regional office and the concessionaire and entered into the Recreation Use Data Report. The local Reclamation office will maintain all concession program management files and records.

(b) External Review. The external review will be conducted and documented by a team of technical specialists who are not employees of the office directly responsible for oversight of the concessions. At a minimum, contracts with a term of 5 years or less will be reviewed once, midterm; contracts with a term exceeding 5 years will be reviewed every 5 years.

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A copy of the review will be sent to the area and regional offices and the concessionaire. The external reviews will examine, at a minimum:

(i) The extent to which the concession operation meets Reclamation’s Concessions Management Policy, Concessions Management Directives and Standards, and Concessions Management Guidelines.

(ii) The extent to which the concession activities are consistent with resource management plans and commercial services plans.

(iii) The extent to which the concessionaire is in compliance with the contract provisions, especially with respect to building improvements, operations, prices charged by concessionaires, fees returned to the Government, and annual financial reporting to Reclamation.

(iv) The quality and condition of the facilities and services related to the health and safety of the employees and the visiting public.

(v) The recordkeeping system(s) used by the local Reclamation office to determine that the concessionaire uses generally accepted accounting practices.

(vi) The recordkeeping system(s) used by the local Reclamation office to conduct quarterly and annual reviews.

(vii) The local Reclamation office records regarding the annual reviews and annual rating.

(c) Corrective Actions. If either the local or external review identifies operational or administrative deficiencies in the operation of a concession, a timetable must be established by the area office and approved by the Regional Director or delegate to correct these deficiencies. The contract must specify the actions that will be taken for marginal or unsatisfactory ratings. The possible actions will include suspension of all or part of the concession operation or termination of the concessions contract.

(d) Disputes. Disputes between Reclamation and the concessionaire are to be resolved through informal negotiations and discussions. In the event that such disputes fail to reach resolution, either party may request a formal, nonbinding arbitration process. Each party selects one member for the arbitration panel and, together, these two members will select the third (neutral) panel member. The panel will treat each party equally and

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fairly. Recommendations must be made by a majority of the panel members. If either party disagrees with the arbiter’s recommendation, he or she may file an appeal with the Secretary of the Interior under 43 CFR, Part 4, Subpart G. The Secretary’s determination is final and binding.

(e) Officials Not to Benefit. No member of the executive, legislative, or judicial branches of the Federal Government may be a party to any concession contract or receive any benefits from a concessions contract.

5. Miscellaneous.

A. RFP and Contract Review. All RFPs and concession contracts must be reviewed and approved by the Commissioner’s Office. The following sequence of steps must be followed:

(1) Area or regional offices must submit the proposed RFP and contract along with supporting information to the Commissioners’s Office. The supporting information must include appropriate planning documentation and financial feasibility evaluation.

(2) The Commissioner’s Office will establish a review team appropriately suited to the complexity and scope of the RFP and the contract. The team will evaluate the RFP and the contract for sufficiency and compliance with the Concessions Management Policy and Concessions Management Directives and Standards.

(3) The Commissioner’s Office will return the approved RFP and contract, or return the RFP and the contract for modification and resubmittal if necessary.

B. Training. All Reclamation offices are responsible for ensuring that Reclamation personnel involved with concessions have received training commensurate with their responsibilities.

C. Nonprofit Organizations.

(1) In certain circumstances, it may be appropriate for cooperative associations or nonprofit organizations to sell goods or provide visitor services to meet Reclamation's goals and objectives. All cooperative association arrangements must be approved by Reclamation if the cooperative associations operate within a concession.

(2) The cooperative association will be responsible for maintaining its accounting system, and the system cannot be combined with the annual financial report submitted by a concessionaire. Nonprofit organizations will also be given very

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clear allowances and restrictions identifying the type of business they are authorized to conduct and the type of goods or services they may provide. Just as with concessionaires, nonprofit organizations are prohibited from providing items or services not specifically authorized. All nonprofit organizations must provide written proof of their nonprofit status.

D. Employment of Reclamation Personnel or Family Members2. Reclamation employees or family members(s) may not be owners, partners, board members, corporate officers, general managers, or employees of any business providing commercial services on the Federal estate, nor may they have any financial interest in such a company. Ownership of stock shares traded in a recognized open market is not considered a financial interest under these directives and standards. Reclamation employees are further prohibited from using their public office for private or family gain. A Reclamation employee involved in activities concerning preparing specification formulation, contract award, or operational administering a concession may not participate in that activity if the employee or a family member is involved in any phase or operation of that concession. Any Reclamation employee responsible for any phase of a concession contract will be excused from duties related to the contract if the employee or a family member is involved in the competition for the contract or the Reclamation employee or a family member may benefit financially from the award of the contract.

E. Concessions Management Guidelines. The Concessions Management Guidelines contain additional information that will assist Reclamation offices in complying with the Concessions Management Policy and the Concessions Management Directives and Standards.

2 Guidance on this issue should be obtained from an ethics counselor in the servicing Reclamation Personnel/Human Resources Office.

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Subject: Concessions Management by Non-Federal Partners

Purpose: Establishes minimum approval standards for all new, modified, or renewed non- Federal concession contracts.

Authority: Reclamation Act of 1902, as amended and supplemented; the Reclamation Project Act of 1939; and the Federal Water Project Recreation Act of 1965, as amended.

Contact: Land, Recreation, and Cultural Resources Office, D-5300

1. Non-Federal Partners. Reclamation may transfer to non-Federal partners the responsibility to develop and manage public recreation areas and concession services. Transferred areas are managed by a partner under Federal authorities, the partner’s authorities, specific contracts, and agreements with Reclamation. Well-planned and -managed concessions on the Federal estate are of mutual interest to Reclamation and its partners. Reclamation is responsible for continuous management oversight of managing partners and their concessions operations.

2. Compliance With Directives and Standards. New concession contracts issued by managing partners must comply with these directives and standards. Existing concession contracts issued by managing partners must, at the first opportunity, be brought into compliance with these directives and standards. If a concession contract is amended or terminated because of contract default or for other reasons and a subsequent concession contract is issued by the non-Federal partner, the subsequent concession contract must be in compliance with these directives and standards.

3. Definitions.

A. Concession. A concession is a non-Federal commercial business that supports appropriate public recreation uses and provides facilities, goods, or services for which revenues are collected. A concession involves the use of the Federal estate and usually involves the development of real property improvements.

B. Exclusive Use. Exclusive use is any use that excludes other appropriate public recreation use or users for extended periods of time. Exclusive use includes, but is not limited to, boat docks, cabins, trailers, manufactured or mobile homes, structures, or amenities that are determined by Reclamation to be exclusive use.

C. Federal Estate. The Federal land and water areas under the primary jurisdiction of the Department of the Interior, Bureau of Reclamation.

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D. Fixed Assets. Fixed assets are any structures, fixtures, or capital improvements permanently attached to the Federal estate.

E. Improvement. An addition to real property that increases its value or utility or that enhances its appearance.

F. Management Agreement. A management agreement is a binding contract between Reclamation and a partner to provide public recreation opportunities and concession services on the Federal estate.

G. Non-Federal Partner. A non-Federal partner is a non-Federal public entity that manages recreation and other resources through a contractual agreement with Reclamation.

H. Total Benefits to the Government. Total benefits include:

(1) Direct Returns. These are fees generated by authorized concession contracts and paid directly to the managing entity or to the United States Treasury.

(2) Direct Benefits. These are fees paid into a contractually designated special account for resource and capital improvements that directly benefit the public in the area of operations where the fees are collected.

(3) Indirect Benefits. These are services performed by the concessionaire that benefit the public or improvements made to the Federal estate by the concessionaire.

4. Managing Partner Agreements.

A. Third-Party Concession Agreements. Third-party concession agreements are agreements between the non-Federal managing partner and another entity to provide concession related services and facilities.

(1) Agreement Standards. Any concession contract, including a contract renewal or modification, issued by the non-Federal managing partner must meet the requirements of these Concessions Management Directives and Standards.

(2) Contract Approval. Before issuing or renewing a non-Federal concession contract, the contract must be approved by Reclamation.

(3) Stand In Stead Conditions. All concession contracts must state that Reclamation will not stand in stead for the managing partner should the

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management agreement expire or be terminated. At Reclamation’s discretion, Reclamation may issue a new concession contract that is in compliance with Reclamation Manual (RM), Concessions Management by Reclamation, LND 04-01. Reclamation will not issue a new contract until all exclusive use has been removed.

B. Review and Evaluation. All management agreements will require Reclamation to conduct annual concession operation reviews and evaluations. Reclamation may also conduct unplanned reviews, as necessary. If a review identifies operational or administrative deficiencies in the operation of a concession, a timetable must be established by the area office to correct these deficiencies.

C. Exclusive Use. New, renewed, or modified management agreements and concession contracts will include clauses that prohibit new exclusive use and require that existing exclusive use be phased out. When existing concession contracts issued by the partner are modified or renewed, Reclamation and the partner must establish a timetable in the concession contract that phases out existing exclusive use before the expiration of the contract. This timetable must be established before the concession contract is resubmitted to Reclamation for approval. The concessionaire and a person hired to guard the concessionaires investment may reside on the Federal estate, with the written approval of Reclamation.

D. Disposition of Fees. Unless State or local laws direct how concession fees paid to the partner will be used, the following will apply: (1) fees will be returned to the area to provide for operation, maintenance, and replacement of recreation facilities and new facility development; (2) any excess fees (profit) will be returned to Reclamation and disposed of according to RM, Crediting of Incidental Revenues, PEC 03-01.

E. Statistical Data. Each year, the managing partner will be required to provide Reclamation with the information specified in Reclamation’s Recreation Use Data Report. Other information may be required, as necessary. This information will provide an accurate inventory of facilities. The report will also contain other data about the managing partner’s recreation and concession operations on the Federal estate.

5. Concessions Planning. Concession development will adhere to the concessions principles listed in RM, Concessions Management (LND P02), will be based on appropriate plans developed by the partner or Reclamation, and will be approved by the Regional Director or delegate. Reclamation can provide direction and assistance in the process, as necessary, to accomplish effective commercial services planning.

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6. Concessions Contracting. The following items will be addressed in all new and renewed concessions contracts issued by non-Federal partners.

A. Sale and Transfer. The sale and transfer of existing concessions must be approved according to the management agreement and reported to Reclamation in a timely manner.

B. Contract Language. The partner will develop and use contract language that complies with all applicable Federal laws, rules, regulations, and Executive Orders. Reclamation can provide examples of standard contract structure and language.

C. Length of Term. The term for a concession may not exceed the term of the management agreement between Reclamation and the partner. In general, terms should be as short as possible and based on the new investment required as determined by a financial feasibility evaluation.

D. Subconcessions. All subconcessions must meet the terms and conditions of the prime concession contract. The partner must approve all subconcessions and notify Reclamation in advance of any authorization that needs Reclamation approval. Generally, subconcessions are discouraged in order to keep operations under single management.

E. Concessions Building and Improvement Program. All designs and construction must comply with applicable Federal, State, and local environmental and historic preservation laws and regulations and building code requirements. In areas where no State or local construction standards exist, Reclamation may provide appropriate standards. Where required and before construction, building permits must be obtained from local authorities by the concessionaire. All facilities will be harmonious in form, line, color, and texture with the surrounding landscape.

F. Operation and Maintenance Plan. Concessionaires will prepare an annual operation and maintenance plan, which must be approved by the partner. The concession contract must clearly state what the plan will contain. Reclamation can provide examples of such plans for the partner and the concessionaire.

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G. Reimbursement for Fixed Assets.

(1) A right to reimbursement may exist when a concessionaire places Reclamation- approved fixed assets on the Federal estate. Title to fixed assets must be established in the concession contract. Reimbursement of a concessionaire for fixed assets is the responsibility of the partner. The method for determining the amount of reimbursement and the method of payment will be specifically addressed in the concession contract between the partner and the concessionaire.

(2) In the event the partner’s agreement with Reclamation expires or is terminated without a commitment by both Reclamation and the partner to enter into another agreement, all the concessionaires’ fixed assets and personal property must be removed from the Federal estate unless Reclamation decides to issue a new concessions contract and decides to retain the fixed assets. [See paragraph 4A(3).] The partner will be responsible for ensuring that the concession area is returned in a condition satisfactory to Reclamation.

(3) It must be clearly stated that no financial obligation or risk will reside in the Federal Government for reimbursement for fixed assets or personal property as a result of the partner awarding a concession contract. All new concession contracts issued by the partner will address rights for reimbursement to the concessionaire for fixed assets. Interests in a concessionaire’s fixed assets may not extend beyond the term of the management agreement. In addition, the concession contract must provide appropriate language regarding interests in fixed assets and methods of reimbursement, if any, to the concessionaire by the partner.

H. Area of Operation. Each concession contract will authorize and define only the physical area necessary to conduct the business activities allowed by the contract. Concession boundaries must be surveyed by the partner and easily recognizable by the visiting public.

I. Additional Facilities or Services. Any proposal for expansion of facilities or services must be reviewed by Reclamation and approved by the partner before the expansion takes place.

J. Exclusive Use. The contract must state that no new facility, service, or site determined by Reclamation to be exclusive use will be allowed. New, renewed, or modified concession contracts issued by the partner will include clauses that establish a timetable for phasing out existing exclusive use before the contract expires.

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K. Reclamation Rights. All concession contracts must be subject to the rights of Reclamation and its agents to use the subject lands and waters for project purposes.

L. Termination of Concession Contract. Concession contracts will acknowledge the right of Reclamation to terminate, for cause, any concession contract authorized by a non-Federal partner.

M. Total Benefits. The partner will establish and recover fair benefits, including direct return and direct and indirect benefits, for the uses, rights, and privileges granted by a concession contract. For disposition of fees, see paragraph 4D.

N. Rates and Merchandise. Rates charged by concessionaires for services, food, lodging, and merchandise will be based on charges for comparable facilities, services, and merchandise provided by the private sector in similar situations. The partner must approve the rates requested by concessionaires.

O. Concessions Safety Program. Concessionaires are responsible for providing and ensuring a safe and healthful environment for both the visiting public and employees by developing, implementing, and administering health, safety, and educational programs to ensure that concession areas are managed in compliance with Federal, State, and local laws, rules, and regulations.

P. Environmental Compliance. Concession contracts will address all activities with potential environmental impacts resulting from the release of hazardous materials to the environment including, but not limited to, the following: pesticides, herbicides, sewage effluents, petroleum products, and liquid waste (gray water). Concessionaires are required to follow all applicable Federal, State, and local laws, rules, and regulations related to hazardous substance use, storage, and disposal. Application for and acquisition of all required certifications and permits are the responsibility of the concessionaire.

Q. Food Sanitation. Concessionaires’ food services will comply with Federal, State, and local food handling and sanitation regulations.

R. Advertising and Signs. The Reclamation logo or name, along with the non-Federal partner logo or name, will be displayed at all concession entrances used by the public. Outdoor signs or other forms of advertising on the Federal estate must be approved by Reclamation before they are displayed.

S. Sale of Personal Property. The sale of personal property other than the approved concessions inventory is prohibited on the Federal estate. No party will be permitted to sell personal property, including vehicles, manufactured or mobile

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homes, house trailers, travel trailers, boats, or personal water craft, on the Federal estate.

T. Utility Services Provided by Reclamation. The fee charged for utility services provided by Reclamation will be based on the recovery of full operating and replacement costs for utility capital investments and comparable utility rates. Utility services include, but are not limited to, electricity, power, water, waste disposal, gas, and communication systems.

U. Insurance Program. Concessionaires must have and maintain an appropriate insurance policy that will indemnify the United States and meet applicable State requirements. All liability policies will provide that the insurance company will have no right of subrogation against the United States and must provide that the United States is named as an additional insured. The partner may establish similar requirements itself, but it must provide Reclamation with a copy of the insurance certificate that identifies the above conditions.

V. System of Recordkeeping. Financial reports and records necessary for management and oversight of concessions must be maintained and available to the partner and to Reclamation upon request. At a minimum, each concessionaire will complete Reclamation’s Annual Financial Report form(s).

7. Concessions Administration.

A. Annual Review and Evaluation. All concession agreements issued by the non- Federal partner will require Reclamation and the non-Federal partner to conduct annual concession reviews and evaluations. The review should identify problems, solutions, and a timetable for resolving the problems in a written report. The non- Federal partner must ensure that any operational or administrative deficiencies noted by the review are corrected in accordance with the established timetable.

B. Nonprofit Organizations. In certain circumstances, it may be suitable for cooperative associations or nonprofit organizations to sell goods or provide visitor services to meet the goals and objectives of both Reclamation and the partner. These associations and organizations must be approved by the partner if the cooperating association operates within a concession or elsewhere on the Federal estate. The cooperating association will be responsible for maintaining its accounting system, and the system cannot be combined with a concessionaire’s annual financial report. Nonprofit organizations will also be given very clear instructions identifying the type of business they are authorized to conduct and the types of goods and services they may provide. All organizations must provide written proof of their nonprofit status to Reclamation and the partner.

(159) 4/29/02 Page 7 Supersedes (74) 4/3/98 LND 04-02 Reclamation Manual Directives and Standards

C. Employment of Reclamation Personnel or Family Members1. Reclamation employees or family members may not be owners, partners, board members, corporate officers, general managers, or employees of any business providing commercial services on the Federal estate, nor may they have any financial interest in such a company. Ownership of stock shares traded in a recognized open market is not considered a financial interest under these directives and standards. Reclamation employees are further prohibited from using their public office for private or family gain. A Reclamation employee involved in preparing specifications, awarding a contract, or administering a concession may not be involved in that activity if the employee or a family member is involved in any phase or operation of that concession. Any Reclamation employee or family member responsible for any phase of a concession contract will be excused from duties related to the concession contract if the employee or a family member is involved in competing for the contract or if the Reclamation employee may benefit financially from the awarding of the contract.

1 Guidance on this issue should be obtained from an ethics counselor in the servicing Reclamation Personnel/Human Resources Office.

(159) 4/29/02 Page 8 Supersedes (74) 4/3/98

Appendix B Engineering Review Technical Memorandum Appendix B Engineering Review Technical Memorandum

B-1 FINAL – April 2011

Memorandum

Date: February 15, 2011 (Revision 1)

To: Jane Branson, URS

From: Russ Konig (URS), Shabad Khalsa (URS), Joseph Barnes

Subject: New Melones Reservoir Marina - Condition Survey and Remediation Estimate

This Memorandum documents a field condition assessment that was performed by URS for the existing marina at the New Melones Lake. After assessing the condition of the marina, URS also prepared an Opinions of Probable Cost (cost estimate) addressing the replacement of unusable components determined to have a remaining useful life of 5 years or less, and the cost of relocating useable components to another, more sheltered location on the lake. The cost to replace unusable components would be the approximate cost to refurbish the marina in its present location to begin another concession lease period. The replacement cost for unusable components added to the cost to relocate useable facilities would be the approximate cost for a marina at a different location on the lake to begin another concession period. Per the request of Duane Paul (Entrix), URS also prepared an Opinion of Probable Cost addressing the removal and replacement of all marina components, regardless of age or condition.

BACKGROUND

Existing recreational facilities at the New Melones Reservoir include a marina as part of the Glory Hole Recreational Area. The marina offers slip rentals, boat and houseboat rentals, refueling, sewage pump out, routine boat maintenance, boat towing, and convenience store. The marina is operated by a concessionaire under a lease agreement with the Bureau of Reclamation (Bureau) that is scheduled to expire in 2012. The Bureau is planning to advertise and enter into a new 30- year lease agreement with a concessionaire for the marina that would begin when the current lease expires. URS understands the new lease agreement could include an optional 10-year extension provision.

FIELD CONDITION ASSESSMENT

Russ Konig and Shabad Khalsa of URS completed the field useful life survey of the marina facilities located at the New Melones Reservoir having a physical address at 6503 Glory Hole Road, Angels Camp, California. The scope of the review included the floating components of the marina and the land based infrastructure directly supporting the floating components. The field assessment was conducted on February 4, 2010, and URS staff was accompanied by Dan Holsapple of the Bureau, a Ranger, and a representative of the current concessionaire. The field visit covered on-shore facilities and a boat tour of floating facilities. Weather conditions at the time of the field visit were overcast with rain showers in the afternoon. Figure 1 shows the location of the New Melones Reservoir and the location of the Marina on the lake. Note that a second site visit was made on November 3, 2010, in connection with alternative marina sites, but some of the land based infrastructure at the existing marina was also revisited and reevaluated for condition.

Based upon information shown on the New Melones Lake Marina Long Term Development Plans (LTDP) dated 4-2-09, there are 2 configurations for the marina, a winter layout and a summer layout. According to the concessionaire, the winter layout is necessary due to the high wave action and potential for damage during the inclement weather months. The marina layout observed during Page 2 of 8

the February 4, 2010 visit was the winter layout, as depicted on Drawing 5 of the LTDP. Referenced drawings are included in Annex B-1.

The URS team gathered information and photographs related to the major marina components. Based on discussions with the concessionaire, a large variable associated with a useful life estimate for the existing components (and future marinas) is the severity of winter storm damage due to wind and large waves. The marina location is not adequately protected at this time by either a land mass or wave attenuation of some sort to mitigate the damage to the docks or floating structures.

Table 1 summarizes the major marina components observed during the site visit, and provides the estimated remaining useful life that would be expected in a protected location. Figure 2 shows the location of each component. Protection could be provided by relocating the marina to a more protective cove or providing suitable wave attenuators. Without either action, the useful life estimates shown in the Table could be reduced significantly.

Table 1 - Condition Assessment Summary Remaining Item Description Reuse Potential Useful life A Marina Overview B Marina Utility Shed 0 None C Covered Boat Dock - East 10 Low D Mooring Dock 20 High E Covered Boat Dock - Central 15 High F Houseboat Dock - West 20 High G House Boat Service Dock 5 Low H Marina Store 5 Low I Dock Attached to Marina Store 3 Very Low J Entrance Ramp 10 High K Gas Dock 0 None L Houseboat Anchorage 10 Medium M Land Based Infrastructure / Facilities 10 Low

Table 2 describes each component listed in Table 1 and provides background for the useful life estimate, and references the appropriate group of photographs. Photographs are included in Annex B-2.

Table 2 - Condition Assessment Detail Item Description Comment A Existing Marina B Marina Utility Shed According to the concessionaire, the marina utility shed was damaged and dislodged from the main marina structure during recent winter storms. It was relocated to the east portion of the marina for storage. Based on observed conditions, this structure has no useful life remaining. Reference pictures B1 through B2 C Covered Boat Dock - East This covered dock is in fair condition. The dock is built upon exposed styrofoam floats which are showing some signs of deterioration. Useful life is estimated to be 10 years if expanded polystyrene foam (EPS) is allowed to remain. Page 3 of 8

Assumption is made that exposed styrofoam floats will no longer be allowed and must be replaced. Based on this assumption, useful life estimated to be 0 years or a significant re-float effort may be required. Reference pictures C1 through C6. D Mooring Dock The mooring dock is in very good condition and appears relatively new. The dock is supported by encapsulated EPS floats. Useful life is estimated to be at least 20 years. Reference pictures D1 through D4 E Covered Boat Dock - Central The covered dock is in good condition and is supported by encapsulated EPS floats. Useful life is estimated to be at least 15 years. Reference pictures E1 through E6 F Houseboat Dock - West The houseboat dock is one of the newer docks in the marina and appears to be in very good condition. The dock contains power and water facilities and is supported by encapsulated EPS floats. Useful life estimated to be at least 20 years. Reference pictures F1 through F10 G House Boat Service Dock The houseboat service dock is constructed of concrete and is supported by an unknown substrate. The dock is showing signs of cracking and spalling edges and would not likely be conducive to supporting a modern marina operation. Useful life estimated to be 5 years. Reference pictures G1 through G7. H Marina Store The marina store is in fair to poor condition. The bathrooms have been recently remodeled; however the remaining facility is showing substantial wear and damage. The structure is supported on exposed EPS floats which show significant deterioration. In addition, the decking panels are generally in disrepair. The sewage ejection system with radio based level controls appears new and could be salvaged. The electrical transformers and panels are beginning to rust. Maintenance on the power distribution panel has probably been minimal. Some electrical equipment is installed with substandard wiring techniques. Electrical terminations and components have probably corroded and aged prematurely in the marine environment. The remaining MEP components are nearing the end of their useful life, although some components may have salvage value. No roof leaks were observed. Useful life estimated to be 5 years if exposed styrofoam is allowed to remain. Assumption is made that exposed styrofoam floats will no longer be allowed and must be replaced. Based on this assumption, useful life estimated to be 0 years. Reference pictures H1 through H39. I Dock Attached to Marina Store The dock directly attached to the marina store is constructed of wood and a composite walking surface. Deterioration was observed from wave damage and boat abrasion/ impact. Useful life estimated to be 3 years. Reference pictures I1 through I7. J Entrance Ramp The entrance ramp onto the marina appears to be in relatively good condition. The ramp is supported on encapsulated floats. Useful life estimated to be 10 years. Reference pictures J1 through J4. K Gas Dock The gas dock is constructed of wood decking and is a state of extreme disrepair. While it appears that the dock is currently being repaired to mitigate any further deterioration, Page 4 of 8

useful life estimated to 0 years. Reference pictures K1 through K3. L Houseboat Anchorage The houseboat anchorage consists of a grid of cables and mooring balls as depicted on the LTDP drawing 5. While the system appears to be in good condition, a significant portion of the system will have to be reconstructed if the marina is relocated. Useful life estimated to be 10 years. Reference pictures L1 through L3. M Land Based Infrastructure and The land based facilities that support the floating marina Facilities consist of septic tanks and piping, fuel storage and piping, fuel island, electrical transformer, main power switchboard, underground and exposed conduit, portable power cables, and a water supply and piping. In addition, there are the access road, two parking areas, fencing, the well site, and a shop/office building. The access road within the scope of this study includes that portion within the marina boundary, not the entire length from the intersection with Highway 49 to the marina. These facilities are in fair condition. Due to low lake levels, it appears that that a new septic poly tank was added and electrical cables have been extended to the floating facility. Average useful life estimated to be 10 years. Reference pictures M1 through M11.

COST ESTIMATES

Based on the above condition assessment, a Class 4 conceptual-level estimate was developed to price replacement of those components with a useful life less than 5 years, and to refurbish land based infrastructure. This estimate, which totals $2,947,170, is presented on Table 3.

Land based infrastructure (Item M in Table 2) is in fair condition and can remain in service with refurbishing that would include repainting electrical cabinets, exposed piping, and fencing; repairing fencing hardware and re-stretching fencing fabric; covering the well-head area in a small shack for weather protection and security; patching asphalt concrete road and parking areas and perimeter dikes; including roads without surfacing; and some modernization of the shop/office building.

The concept of relocating the marina was discussed as part of future planning to mitigate the storm damage potential that exists at the present site. Table 4 provides an estimate of the costs related to relocating the marina to another location on the lake, which totals $760,734. Only the floating components suitable for continued use and the infrastructure to directly support the floating components were addressed in this estimate.

Additionally per a request from Duane Paul, a Class 4 conceptual-level estimate was developed to price the replacement of the entire marina, regardless of age or condition. The approximate useful life of each new component is also included. This estimate is presented in Table 5 and 6.

Estimates are based upon 2010 dollar values. Estimates include escalation to 2012 and a 15- percent contingency.

Reference the attached detailed estimates for the cost breakdown per component and the applicable exclusions. Page 5 of 8

Table 3 - Class 4 conceptual-level estimate Item Description Quantity Unit Unit Price Amount Total B Marina Utility Shed $ 21,150 Demo 150 SF $ 6.00 $ 900 Substructure 150 SF $ 35.00 $ 5,250 Shed 150 SF $ 100.00 $ 15,000 C Covered Boat Dock - East $ 234,203 Demo 7178 SF $ 3.50 $ 25,123 Dock 1872 SF $ 35.00 $ 65,520 Dock Cover 7178 SF $ 20.00 $ 143,560 D Mooring Dock Reused E Covered Boat Dock - Central Reused F Houseboat Dock - West Reused G House Boat Service Dock $ 91,920 Demo 1640 SF $ 3.00 $ 4,920 Dock 1540 SF $ 50.00 $ 77,000 Service Shed 100 SF $ 100.00 $ 10,000 H Marina Store $ 773,200 Demo 5200 SF $ 6.00 $ 31,200 Substructure 5200 SF $ 35.00 $ 182,000 Structure 2800 SF $ 200.00 $ 560,000 I Dock Attached to Marina Store $ 205,200 Demo 5400 SF $ 3.00 $ 16,200 Main Dock 5400 SF $ 35.00 $ 189,000 J Entrance Ramp Reused K Gas Dock $ 87,600 Demo 1200 SF $ 3.00 $ 3,600 Dock 1200 SF $ 45.00 $ 54,000 Services 1200 SF $ 25.00 $ 30,000 L Houseboat Anchorage $ 654,500 Cable 19500 SF $ 10.00 $ 195,000 Mooring ball anchors 50 SF $ 7,500.00 $ 375,000 Adjustment winch 1 SF $ 3,500.00 $ 3,500 Main stays 9 SF $ 5,000.00 $ 45,000 Land cassions 18 SF $ 2,000.00 $ 36,000 M Land Based Infrastructure / Facilities $ 75,000 Refub (E) land based infrastructure 1 Al $ 75,000.00 $ 75,000

Sub-total 2,142,773 Contractor Markup % 15 $ 321,416 321,416 Sub-total 2,464,189 Design Contingency % 15 $ 369,628 $ 369,628 Sub-total 2,833,817 Escalation to 2012 % 4 $ 113,353 $ 113,353 Table 3 Total 2,947,170 Page 6 of 8

Floating component relocation 1 Al $ 50,000.00 $ 50,000 Parking lot 50000 SF $ 5.00 $ 250,000 Lighting 10 Ea $ 4,000.00 $ 40,000 Access / launch ramp concrete 6000 SF $ 8.00 $ 48,000 Electrical substation 1 Al $ 75,000.00 $ 75,000 Distribution to 1st connection point 1 Al $ 20,000.00 $ 20,000 Convault 10000 fuel tank 1 Ea $ 30,000.00 $ 30,000 Fuel Piping/ Equipment 1 Al $ 5,000.00 $ 5,000 Fuel tank SOG 150 SF $ 10.00 $ 1,500 Septic tank 1 Al $ 7,000.00 $ 7,000 Septic piping 1 Al $ 7,500.00 $ 7,500 Septic tank SOG 200 SF $ 8.00 $ 1,600 Misc fencing 1 Al $ 10,000.00 $ 10,000 Water piping 1 Al $ 7,500.00 $ 7,500

Sub-total $ 553,100 Contractor Markup % 15 $ 82,965 $ 82,965 Sub-total $ 636,065 Design Contingency % 15 $ 95,410 $ 95,410 Sub-total $ 731,475 Escalation to 2012 % 4 $ 29,259 $ 29,259 Table 4 Total $ 760,734

Total of Tables 3 & 4 $ 3,707,904

Exclusions for Tables 3 & 4: Replacement of existing items not priced Dump fees or salvage value Service yard or maintenance functions Propane barge, fireboat or gov boat slip Wave rider floats Offsite infrastructure Provision of temp power Paving or grading for new access road(s) Well or water line to new location Wave attenuation Power to transformer location Repair of refurbishment of relocated items Telephone Signage EIR or Geotech study Habitat or offsite mitigation Permits or fees Design, CM or staff support costs

Page 7 of 8

Table 5 - Class 4 conceptual-level estimate - 100% Replacement of Floating Components Estimated Item Description Quantity Unit Unit Price Amount Total Useful life (Yrs) B Marina Utility Shed $ 21,150 30 Removal to above high water line 150 SF $ 6.00 $ 900 Substructure 150 SF $ 35.00 $ 5,250 Shed 150 SF $ 100.00 $ 15,000 C Covered Boat Dock - East $ 230,614 30 Removal to above high water line 7178 SF $ 3.00 $ 21,534 Dock 1872 SF $ 35.00 $ 65,520 Dock Cover 7178 SF $ 20.00 $ 143,560 D Mooring Dock $ 102,600 30 Removal to above high water line 2700 SF $ 3.00 $ 8,100 Dock 2700 SF $ 35.00 $ 94,500 E Covered Boat Dock - Central $ 303,699 30 Removal to above high water line 8773 SF $ 3.00 $ 26,319 Dock 2912 SF $ 35.00 $ 101,920 Dock Cover 8773 SF $ 20.00 $ 175,460 F Houseboat Dock - West $ 413,488 30 Removal to above high water line 9616 SF $ 3.00 $ 28,848 Dock 9616 SF $ 35.00 $ 336,560 Services 9616 SF $ 5.00 $ 48,080 G House Boat Service Dock $ 91,920 30 Removal to above high water line 1640 SF $ 3.00 $ 4,920 Dock 1540 SF $ 50.00 $ 77,000 Service Shed 100 SF $ 100.00 $ 10,000 H Marina Store $ 773,200 30 Removal to above high water line 5200 SF $ 6.00 $ 31,200 Substructure 5200 SF $ 35.00 $ 182,000 Structure 2800 SF $ 200.00 $ 560,000 I Dock Attached to Marina Store $ 205,200 30 Removal to above high water line 5400 SF $ 3.00 $ 16,200 Dock 5400 SF $ 35.00 $ 189,000 J Entrance Ramp $ 13,750 30 Removal to above high water line 50 LF $ 15.00 $ 750 Ramp 50 LF $ 260.00 $ 13,000 K Gas Dock $ 87,600 20 Removal to above high water line 1200 SF $ 3.00 $ 3,600 Dock 1200 SF $ 45.00 $ 54,000 Services 1200 SF $ 25.00 $ 30,000 L Houseboat Anchorage $ 674,500 40 Removal to above high water line 1 AL $ 20,000.00 $ 20,000 Cable 19500 SF $ 10.00 $ 195,000 Mooring ball anchors 50 SF $ 7,500.00 $ 375,000 Adjustment winch 1 SF $ 3,500.00 $ 3,500 Main stays 9 SF $ 5,000.00 $ 45,000 Land cassions 18 SF $ 2,000.00 $ 36,000

Sub-total 2,917,721 Contractor Markup % 15 $ 437,658 437,658 Sub-total 3,355,379 Design Contingency % 15 $ 503,307 $ 503,307 Sub-total 3,858,686 Escalation to 2012 % 4 $ 154,347 $ 154,347 Table 5 Total 4,013,033 Page 8 of 8

Table 6 - Class 4 conceptual-level estimate - 100% Replacement Land Based Components Estimated Item Description Quantity Unit Unit Price Amount Total Useful life (Yrs) Installation of New Land Based Infrastructure Support $ 523,100 40 Parking lot 50000 SF $ 5.00 $ 250,000 Lighting 10 Ea $ 4,000.00 $ 40,000 Access / launch ramp concrete 6000 SF $ 8.00 $ 48,000 Electrical substation 1 Al $ 75,000.00 $ 75,000 Distribution to 1st connection point 1 Al $ 20,000.00 $ 20,000 Convault 10000 fuel tank 1 Ea $ 30,000.00 $ 30,000 Fuel Piping/ Equipment 1 Al $ 5,000.00 $ 5,000 Fuel tank SOG 150 SF $ 10.00 $ 1,500 Septic tank 1 Al $ 7,000.00 $ 7,000 Septic piping 1 Al $ 7,500.00 $ 7,500 Septic tank SOG 200 SF $ 8.00 $ 1,600 Water piping 1 Al $ 7,500.00 $ 7,500 Misc fencing 1 Al $ 10,000.00 $ 10,000 Demo of abandoned MEP facilities 1 Al $ 20,000.00 $ 20,000

Sub-total $ 523,100 Contractor Markup % 15 $ 78,465 $ 78,465 Sub-total $ 601,565 Design Contingency % 15 $ 90,235 $ 90,235 Sub-total $ 691,800 Escalation to 2012 % 4 $ 27,672 $ 27,672 Table 6 Total $ 719,472 Total of Table 5 & 6 $ 4,732,505

Exclusions for Table 5 & 6: Removed marina structures will be let at high water mark Dump fees or salvage value Replacement of existing items not priced Service yard or maintenance functions Propane barge, fireboat or gov boat slip Wave rider floats Offsite infrastructure Provision of temp power Paving or grading for new access road(s) Well or water line to new location Equipment or material for extension of MEP from main POC due to water height fluctuation Landscaping Parking bumpers Land based buildings Wave attenuation Power to transformer location Telephone Service to marina Signage EIR or Geotech study Habitat or offsite mitigation Permits or fees Design, CM or staff support costs

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Item G - Houseboat Service Dock

Item H - Marina Store

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Item J - Entrance Ramp Item L - Houseboat Anchorage

Marina Facility Components

Figure 2

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Appendix C Financial Feasibility Model – Analytical Assumptions Appendix C Financial Feasibility Model – Analytical Assumptions

C-1 FINAL – April 2011

New Melones Lake Commercial Services Study & Financial Feasibility Evaluation

Table C-1. Key Assumptions Used in the Financial Feasibility Analysis Assumption Value Visitation Levels (Annual % Change) Visitation (Year 1-20) 1.30% Visitation (Year 11-20) 1.30% Visitation (Year 21-30) 1.21% Visitation (Year 31-40) 1.13% Length of Season (Days) Peak Season 155 Off-Peak Season 210 Seasonal Rates NO Concessions Term (Years) 30 Capital Investment Responsibility Concessionaire Discount Rate 15.00% Franchise Fee 4.00% Occupancy Fee $1,000

Table C-2. Facility Assumptions Used in the Financial Feasibility Analysis: Marina Services MARINA: Moorage, Slip Rentals, Gas Sales, & Boat Repair Number of Facilities Moorage Area 50 slips Transient Slips 20 slips 20' covered 28 slips 24' open 44 slips 24' covered 28 slips House Boat 38 slips Fixed Pier Area 1,000 sq. ft. Slip Rental & Moorage Occupancy Peak Off-Peak Moorings 95% 95% Transient Slips 75% 10% 20' covered 95% 95% 24' open 95% 95% 24' covered 95% 95% House Boat 95% 95% Gas Sales Peak Off-Peak Gross Sales $214,000 $17,000 Boat Repair $20,000 Annually MARINA: Boat Rentals Number of Boats Houseboats 13 watercraft Fishing Boat 3 watercraft Patio Boat 4 watercraft

C-2 FINAL – April 2011 Appendix C Financial Feasibility Model – Analytical Assumptions

Table C-2. Facility Assumptions Used in the Financial Feasibility Analysis: Marina Services MARINA: Moorage, Slip Rentals, Gas Sales, & Boat Repair Personal Watercraft 4 watercraft Wakesetter 2 watercraft Blue Water Ski Boat 6 watercraft Boat Rental Occupancy Peak Off-Peak Houseboats 40.0% 3.0% Fishing Boat 15.0% 1.0% Patio Boat 30.0% 2.0% Personal Watercraft 10.0% 1.0% Wakesetter 30.0% 2.0% Blue Water Ski Boat 20.0% 1.0% MARINA: Food Service Type Outdoor Grill Sales Peak Off-Peak Average Daily Sales $1,000 $100 MARINA: Recreation Supply Store Size 1,000 sq. ft Annual Sales $110,000 year MARINA: Dry Boat Storage Type Open Dry Storage Units 100 Occupancy 75% Avg. Annual Rate $80 $/month (24' space)

Table C-3. Facility Assumptions Used in the Financial Feasibility Analysis: RV Park

RV PARK Units 75 units Occupancy Peak Off-Peak Occupancy Rate 50% 25% Rate Peak Off-Peak Nightly Rate $50 $45

Table C-4. Facility Assumptions Used in the Financial Feasibility Analysis: Equestrian Riding Stables EQUESTRIAN RIDING STABLES Services Riding Rentals Only Number of Horses 15 Horses Office Size 1,200 Sq. Ft.

C-3 FINAL – April 2011 New Melones Lake Commercial Services Study & Financial Feasibility Evaluation

Rental Occupancy Peak Off-Peak % of Capacity 30% 5% Rental Rates Peak Off-Peak Equivalent Hourly Rate $45 $35

C-4 FINAL – April 2011 Appendix D Financial Feasibility Model – Results Tables Appendix D Financial Feasibility Model – Result Tables

D-1 FINAL – April 2011

Table D-1. Operating Revenues and Expenses for Marina-Related Facilities

Year

0123456789101112131415161718192021222324252627282930 REVENUES BY OPERATING DEPARTMENT

Moorings and Slip Rentals $0 $990,000 $990,000 $990,000 $990,000 $990,000 $990,000 $990,000 $990,000 $990,000 $990,000 $990,000 $990,000 $990,000 $990,000 $990,000 $990,000 $990,000 $990,000 $990,000 $990,000 $990,000 $990,000 $990,000 $990,000 $990,000 $990,000 $990,000 $990,000 $990,000 $990,000

Gas Sales $0 $231,000 $234,000 $237,000 $240,000 $243,000 $246,000 $250,000 $253,000 $256,000 $259,000 $263,000 $266,000 $270,000 $273,000 $277,000 $280,000 $284,000 $288,000 $291,000 $295,000 $299,000 $302,000 $306,000 $310,000 $314,000 $317,000 $321,000 $325,000 $329,000 $333,000

Boat Repair $0 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000

Boat Rentals $0 $1,055,000 $1,068,000 $1,082,000 $1,096,000 $1,111,000 $1,125,000 $1,140,000 $1,155,000 $1,170,000 $1,185,000 $1,200,000 $1,216,000 $1,232,000 $1,248,000 $1,264,000 $1,280,000 $1,297,000 $1,314,000 $1,331,000 $1,348,000 $1,364,000 $1,381,000 $1,398,000 $1,415,000 $1,432,000 $1,449,000 $1,466,000 $1,484,000 $1,502,000 $1,520,000

Rec Supply Store $0 $111,000 $112,000 $114,000 $115,000 $117,000 $118,000 $120,000 $121,000 $123,000 $125,000 $126,000 $128,000 $129,000 $131,000 $133,000 $135,000 $136,000 $138,000 $140,000 $142,000 $143,000 $145,000 $147,000 $149,000 $151,000 $152,000 $154,000 $156,000 $158,000 $160,000

Dry Storage $0 $72,000 $73,000 $74,000 $75,000 $76,000 $77,000 $78,000 $79,000 $80,000 $81,000 $82,000 $83,000 $84,000 $85,000 $86,000 $87,000 $89,000 $90,000 $91,000 $92,000 $93,000 $94,000 $95,000 $97,000 $98,000 $99,000 $100,000 $101,000 $103,000 $104,000

Outdoor Grill $0 $176,000 $178,000 $181,000 $183,000 $185,000 $188,000 $190,000 $193,000 $195,000 $198,000 $200,000 $203,000 $206,000 $208,000 $211,000 $214,000 $216,000 $219,000 $222,000 $225,000 $228,000 $230,000 $233,000 $236,000 $239,000 $242,000 $245,000 $248,000 $251,000 $254,000

Total Operating Revenues $0 $2,654,000 $2,676,000 $2,697,000 $2,719,000 $2,741,000 $2,764,000 $2,787,000 $2,810,000 $2,833,000 $2,857,000 $2,881,000 $2,905,000 $2,930,000 $2,955,000 $2,980,000 $3,006,000 $3,032,000 $3,058,000 $3,085,000 $3,112,000 $3,137,000 $3,163,000 $3,189,000 $3,215,000 $3,242,000 $3,269,000 $3,296,000 $3,324,000 $3,352,000 $3,380,000

EXPENSES

Cost of Sales $0 $278,000 $282,000 $286,000 $289,000 $293,000 $297,000 $301,000 $305,000 $309,000 $313,000 $317,000 $321,000 $325,000 $329,000 $333,000 $338,000 $342,000 $347,000 $351,000 $356,000 $360,000 $364,000 $369,000 $373,000 $378,000 $382,000 $387,000 $392,000 $396,000 $401,000

Personnel Expenses $0 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000

Maintenance & Repair $0 $205,000 $208,000 $210,000 $213,000 $216,000 $219,000 $222,000 $225,000 $227,000 $230,000 $233,000 $236,000 $239,000 $243,000 $246,000 $249,000 $252,000 $255,000 $259,000 $262,000 $265,000 $269,000 $272,000 $275,000 $278,000 $282,000 $285,000 $289,000 $292,000 $296,000

Other Operating $0 $15,000 $15,000 $15,000 $16,000 $16,000 $16,000 $16,000 $16,000 $17,000 $17,000 $17,000 $17,000 $18,000 $18,000 $18,000 $18,000 $18,000 $19,000 $19,000 $19,000 $19,000 $20,000 $20,000 $20,000 $20,000 $21,000 $21,000 $21,000 $21,000 $22,000

Insurance $0 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000

Franchise Fee $0 $104,000 $107,000 $108,000 $109,000 $110,000 $111,000 $111,000 $112,000 $113,000 $114,000 $115,000 $116,000 $117,000 $118,000 $119,000 $120,000 $121,000 $122,000 $123,000 $124,000 $125,000 $127,000 $128,000 $129,000 $130,000 $131,000 $132,000 $133,000 $134,000 $135,000

Annual Lease $0 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000

Refunds $0 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000

Total Operating Expenses $0 $1,596,000 $1,606,000 $1,613,000 $1,620,000 $1,628,000 $1,636,000 $1,644,000 $1,652,000 $1,660,000 $1,668,000 $1,676,000 $1,684,000 $1,693,000 $1,701,000 $1,710,000 $1,719,000 $1,728,000 $1,737,000 $1,746,000 $1,755,000 $1,764,000 $1,773,000 $1,782,000 $1,791,000 $1,800,000 $1,809,000 $1,818,000 $1,828,000 $1,838,000 $1,847,000

Income Taxes (Federal & State) $0 $51,000 $56,000 $63,000 $70,000 $77,000 $84,000 $91,000 $99,000 $106,000 $113,000 $121,000 $129,000 $136,000 $144,000 $151,000 $158,000 $166,000 $173,000 $181,000 $188,000 $195,000 $203,000 $210,000 $217,000 $225,000 $233,000 $240,000 $248,000 $256,000 $264,000

Depreciation $0 $475,000 $475,000 $475,000 $475,000 $475,000 $475,000 $475,000 $475,000 $475,000 $475,000 $475,000 $475,000 $475,000 $475,000 $475,000 $475,000 $475,000 $475,000 $475,000 $475,000 $475,000 $475,000 $475,000 $475,000 $475,000 $475,000 $475,000 $475,000 $475,000 $475,000

Interest $189,000 $442,000 $442,000 $442,000 $442,000 $442,000 $442,000 $442,000 $442,000 $442,000 $442,000 $442,000 $442,000 $442,000 $442,000 $442,000 $442,000 $442,000 $442,000 $442,000 $442,000 $442,000 $442,000 $442,000 $442,000 $442,000 $442,000 $442,000 $442,000 $442,000 $442,000

Total Expenses $189,000 $2,564,000 $2,579,000 $2,593,000 $2,608,000 $2,622,000 $2,637,000 $2,652,000 $2,667,000 $2,683,000 $2,698,000 $2,714,000 $2,730,000 $2,746,000 $2,763,000 $2,778,000 $2,794,000 $2,811,000 $2,827,000 $2,844,000 $2,860,000 $2,876,000 $2,892,000 $2,909,000 $2,925,000 $2,942,000 $2,959,000 $2,976,000 $2,993,000 $3,010,000 $3,028,000

EBITDA $0 $1,058,000 $1,070,000 $1,084,000 $1,099,000 $1,113,000 $1,128,000 $1,143,000 $1,158,000 $1,174,000 $1,189,000 $1,205,000 $1,221,000 $1,237,000 $1,253,000 $1,270,000 $1,287,000 $1,304,000 $1,321,000 $1,339,000 $1,356,000 $1,373,000 $1,390,000 $1,407,000 $1,425,000 $1,442,000 $1,460,000 $1,478,000 $1,496,000 $1,514,000 $1,533,000

Net Profit ($189,000) $90,000 $97,000 $104,000 $111,000 $119,000 $127,000 $135,000 $143,000 $151,000 $159,000 $167,000 $175,000 $184,000 $192,000 $202,000 $211,000 $221,000 $231,000 $241,000 $251,000 $261,000 $270,000 $280,000 $290,000 $300,000 $310,000 $321,000 $331,000 $341,000 $352,000 Net Profit (% of Revenues) -- 3.4% 3.6% 3.9% 4.1% 4.3% 4.6% 4.8% 5.1% 5.3% 5.6% 5.8% 6.0% 6.3% 6.5% 6.8% 7.0% 7.3% 7.6% 7.8% 8.1% 8.3% 8.5% 8.8% 9.0% 9.3% 9.5% 9.7% 10.0% 10.2% 10.4% Table D-2. Cash-Flow Analysis for Marina-Related Facilities

Year

0 1 2 3456789101112131415161718192021222324252627282930

Cash In

Beginning Cash $0 ($2,295,000) ($1,796,000) ($1,292,000) ($780,000) ($260,000) $259,000 $793,000 $1,336,000 $1,887,000 $2,445,000 $2,144,000 $2,719,000 $3,302,000 $3,894,000 $4,494,000 $5,095,000 $5,715,000 $6,344,000 $6,983,000 $7,632,000 $7,423,000 $8,092,000 $8,771,000 $9,459,000 $10,157,000 $10,857,000 $11,575,000 $12,303,000 $13,042,000 $13,792,000

Sales $0 $2,653,000 $2,675,000 $2,696,000 $2,718,000 $2,740,000 $2,763,000 $2,786,000 $2,809,000 $2,832,000 $2,856,000 $2,880,000 $2,904,000 $2,929,000 $2,954,000 $2,979,000 $3,005,000 $3,031,000 $3,057,000 $3,083,000 $3,110,000 $3,136,000 $3,162,000 $3,188,000 $3,214,000 $3,241,000 $3,268,000 $3,295,000 $3,323,000 $3,351,000 $3,379,000

Other Revenues $0 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000

Sale of Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $1,292,000

Total Available Cash $0 $359,000 $879,000 $1,406,000 $1,940,000 $2,481,000 $3,022,000 $3,580,000 $4,146,000 $4,720,000 $5,302,000 $5,025,000 $5,624,000 $6,232,000 $6,849,000 $7,474,000 $8,101,000 $8,747,000 $9,402,000 $10,068,000 $10,744,000 $10,560,000 $11,255,000 $11,959,000 $12,674,000 $13,399,000 $14,125,000 $14,871,000 $15,627,000 $16,394,000 $18,464,000

Cash Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Salaries $0 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000 $838,000

Other Operating Expenses $0 $758,000 $767,000 $775,000 $782,000 $790,000 $798,000 $805,000 $813,000 $821,000 $829,000 $838,000 $846,000 $854,000 $863,000 $872,000 $881,000 $889,000 $898,000 $908,000 $917,000 $926,000 $934,000 $943,000 $952,000 $962,000 $971,000 $980,000 $990,000 $999,000 $1,009,000

Loan Payments $189,000 $509,000 $509,000 $509,000 $509,000 $509,000 $509,000 $509,000 $509,000 $509,000 $509,000 $509,000 $509,000 $509,000 $509,000 $509,000 $509,000 $509,000 $509,000 $509,000 $509,000 $509,000 $509,000 $509,000 $509,000 $509,000 $509,000 $509,000 $509,000 $509,000 $509,000

Capital Expenditures $2,105,000 $0 $0 $0 $0 $9,000 $0 $0 $0 $0 $868,000 $0 $0 $0 $0 $9,000 $0 $0 $0 $0 $868,000 $0 $0 $0 $0 $9,000 $0 $0 $0 $0 $883,000

Tax Payments $0 $51,000 $56,000 $63,000 $70,000 $77,000 $84,000 $91,000 $99,000 $106,000 $113,000 $121,000 $129,000 $136,000 $144,000 $151,000 $158,000 $166,000 $173,000 $181,000 $188,000 $195,000 $203,000 $210,000 $217,000 $225,000 $233,000 $240,000 $248,000 $256,000 $264,000

Total Cash Out $2,295,000 $2,156,000 $2,171,000 $2,185,000 $2,200,000 $2,223,000 $2,229,000 $2,244,000 $2,259,000 $2,275,000 $3,158,000 $2,306,000 $2,322,000 $2,338,000 $2,354,000 $2,379,000 $2,386,000 $2,402,000 $2,419,000 $2,435,000 $3,321,000 $2,468,000 $2,484,000 $2,501,000 $2,517,000 $2,542,000 $2,551,000 $2,568,000 $2,585,000 $2,602,000 $3,503,000

Annual Cash Flow ($2,295,000) $498,000 $505,000 $512,000 $520,000 $519,000 $535,000 $543,000 $551,000 $559,000 ($302,000) $575,000 $583,000 $592,000 $600,000 $601,000 $619,000 $629,000 $639,000 $649,000 ($209,000) $669,000 $678,000 $688,000 $698,000 $700,000 $718,000 $729,000 $739,000 $749,000 $1,169,000 Cumalative Cash Flow ($2,295,000) ($1,796,000) ($1,292,000) ($780,000) ($260,000) $259,000 $793,000 $1,336,000 $1,887,000 $2,445,000 $2,144,000 $2,719,000 $3,302,000 $3,894,000 $4,494,000 $5,095,000 $5,715,000 $6,344,000 $6,983,000 $7,632,000 $7,423,000 $8,092,000 $8,771,000 $9,459,000 $10,157,000 $10,857,000 $11,575,000 $12,303,000 $13,042,000 $13,792,000 $14,961,000 Table D-3. Operating Revenues and Expenses for RV Park

Year 0 123456789101112131415161718192021222324252627282930 REVENUES BY OPERATING DEPARTMENT Registrations $0 $468,000 $474,000 $480,000 $486,000 $493,000 $499,000 $506,000 $512,000 $519,000 $525,000 $532,000 $539,000 $546,000 $553,000 $561,000 $568,000 $575,000 $583,000 $590,000 $598,000 $605,000 $612,000 $620,000 $627,000 $635,000 $643,000 $650,000 $658,000 $666,000 $674,000 Store Sales $0 $95,000 $96,000 $98,000 $99,000 $100,000 $102,000 $103,000 $104,000 $106,000 $107,000 $108,000 $110,000 $111,000 $113,000 $114,000 $116,000 $117,000 $119,000 $120,000 $122,000 $123,000 $125,000 $126,000 $128,000 $129,000 $131,000 $132,000 $134,000 $136,000 $137,000 Other Income $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Operating Revenues $0 $563,000 $570,000 $578,000 $585,000 $593,000 $601,000 $608,000 $616,000 $624,000 $632,000 $641,000 $649,000 $657,000 $666,000 $675,000 $683,000 $692,000 $701,000 $710,000 $720,000 $728,000 $737,000 $746,000 $755,000 $764,000 $774,000 $783,000 $792,000 $802,000 $812,000 EXPENSES $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Cost of Sales $0 $55,000 $56,000 $56,000 $57,000 $58,000 $58,000 $59,000 $60,000 $61,000 $62,000 $62,000 $63,000 $64,000 $65,000 $66,000 $67,000 $67,000 $68,000 $69,000 $70,000 $71,000 $72,000 $73,000 $73,000 $74,000 $75,000 $76,000 $77,000 $78,000 $79,000 Personnel Expenses $0 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 Maintenance & Repair $0 $60,000 $60,000 $61,000 $62,000 $63,000 $64,000 $64,000 $65,000 $66,000 $67,000 $68,000 $69,000 $70,000 $71,000 $71,000 $72,000 $73,000 $74,000 $75,000 $76,000 $77,000 $78,000 $79,000 $80,000 $81,000 $82,000 $83,000 $84,000 $85,000 $86,000 Other Operating $0 $135,000 $137,000 $138,000 $140,000 $142,000 $144,000 $146,000 $148,000 $150,000 $151,000 $153,000 $155,000 $157,000 $159,000 $162,000 $164,000 $166,000 $168,000 $170,000 $172,000 $174,000 $177,000 $179,000 $181,000 $183,000 $185,000 $187,000 $190,000 $192,000 $194,000 Insurance $0 $21,000 $21,000 $21,000 $21,000 $21,000 $21,000 $21,000 $21,000 $21,000 $21,000 $21,000 $21,000 $21,000 $21,000 $21,000 $21,000 $21,000 $21,000 $21,000 $21,000 $21,000 $21,000 $21,000 $21,000 $21,000 $21,000 $21,000 $21,000 $21,000 $21,000 Franchise Fee $0 $23,000 $23,000 $23,000 $23,000 $24,000 $24,000 $24,000 $25,000 $25,000 $25,000 $26,000 $26,000 $26,000 $27,000 $27,000 $27,000 $28,000 $28,000 $28,000 $29,000 $29,000 $29,000 $30,000 $30,000 $31,000 $31,000 $31,000 $32,000 $32,000 $32,000 Annual Lease $0 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 Total Operating Expenses $0 $414,000 $417,000 $421,000 $424,000 $428,000 $432,000 $436,000 $439,000 $443,000 $447,000 $451,000 $455,000 $459,000 $463,000 $467,000 $472,000 $476,000 $480,000 $485,000 $489,000 $493,000 $498,000 $502,000 $506,000 $511,000 $515,000 $520,000 $524,000 $529,000 $534,000 Income Taxes (Federal & State) $0 $27,000 $28,000 $30,000 $32,000 $34,000 $36,000 $38,000 $39,000 $41,000 $43,000 $45,000 $48,000 $50,000 $52,000 $54,000 $56,000 $58,000 $60,000 $63,000 $65,000 $67,000 $69,000 $72,000 $74,000 $76,000 $78,000 $81,000 $83,000 $85,000 $88,000 Depreciation $0 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 Interest $18,000 $43,000 $43,000 $43,000 $43,000 $43,000 $43,000 $43,000 $43,000 $43,000 $43,000 $43,000 $43,000 $43,000 $43,000 $43,000 $43,000 $43,000 $43,000 $43,000 $43,000 $43,000 $43,000 $43,000 $43,000 $43,000 $43,000 $43,000 $43,000 $43,000 $43,000 Total Expenses $18,000 $500,000 $505,000 $510,000 $516,000 $521,000 $527,000 $533,000 $538,000 $544,000 $550,000 $556,000 $562,000 $568,000 $575,000 $581,000 $587,000 $594,000 $600,000 $607,000 $614,000 $620,000 $627,000 $633,000 $640,000 $646,000 $653,000 $660,000 $667,000 $674,000 $681,000 EBITDA $0 $149,000 $153,000 $157,000 $161,000 $165,000 $169,000 $173,000 $177,000 $181,000 $185,000 $190,000 $194,000 $198,000 $203,000 $207,000 $212,000 $216,000 $221,000 $226,000 $230,000 $235,000 $240,000 $244,000 $249,000 $254,000 $258,000 $263,000 $268,000 $273,000 $278,000 Net Profit ($18,000) $63,000 $65,000 $68,000 $70,000 $72,000 $74,000 $76,000 $78,000 $80,000 $82,000 $85,000 $87,000 $89,000 $91,000 $94,000 $96,000 $99,000 $101,000 $103,000 $106,000 $108,000 $111,000 $113,000 $115,000 $118,000 $120,000 $123,000 $126,000 $128,000 $131,000 Net Profit (% of Revenues) -- 11.2% 11.5% 11.7% 11.9% 12.1% 12.3% 12.5% 12.7% 12.8% 13.0% 13.2% 13.4% 13.6% 13.7% 13.9% 14.1% 14.2% 14.4% 14.6% 14.7% 14.9% 15.0% 15.2% 15.3% 15.4% 15.6% 15.7% 15.8% 16.0% 16.1%

8/6/2010 Table D-4. Cash-Flow Analysis for RV Park

Year 0 12345678 9 10 11 12 13 14 1516 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Cash In

Beginning Cash $0 ($224,000) ($151,000) ($75,000) $2,000 $82,000 $163,000 $247,000 $333,000 $421,000 $511,000 $603,000 $698,000 $794,000 $893,000 $995,000 $1,098,000 $1,204,000 $1,313,000 $1,424,000 $1,537,000 $1,653,000 $1,771,000 $1,891,000 $2,014,000 $2,140,000 $2,268,000 $2,398,000 $2,531,000 $2,666,000 $2,804,000

Sales $0 $563,000 $570,000 $578,000 $585,000 $593,000 $601,000 $608,000 $616,000 $624,000 $632,000 $641,000 $649,000 $657,000 $666,000 $675,000 $683,000 $692,000 $701,000 $710,000 $720,000 $728,000 $737,000 $746,000 $755,000 $764,000 $774,000 $783,000 $792,000 $802,000 $812,000

Other Revenues $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Sale of Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $328,000

Total Available Cash $0 $339,000 $420,000 $502,000 $587,000 $675,000 $764,000 $855,000 $949,000 $1,045,000 $1,143,000 $1,244,000 $1,347,000 $1,452,000 $1,559,000 $1,669,000 $1,782,000 $1,897,000 $2,014,000 $2,134,000 $2,257,000 $2,381,000 $2,508,000 $2,638,000 $2,770,000 $2,904,000 $3,041,000 $3,181,000 $3,323,000 $3,468,000 $3,944,000

Cash Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Salaries $0 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000

Other Operating Expenses $0 $294,000 $297,000 $301,000 $305,000 $308,000 $312,000 $316,000 $320,000 $323,000 $327,000 $331,000 $335,000 $339,000 $343,000 $348,000 $352,000 $356,000 $361,000 $365,000 $369,000 $374,000 $378,000 $382,000 $387,000 $391,000 $395,000 $400,000 $404,000 $409,000 $414,000

Loan Payments $18,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000

Capital Expenditures $205,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Tax Payments $0 $27,000 $28,000 $30,000 $32,000 $34,000 $36,000 $38,000 $39,000 $41,000 $43,000 $45,000 $48,000 $50,000 $52,000 $54,000 $56,000 $58,000 $60,000 $63,000 $65,000 $67,000 $69,000 $72,000 $74,000 $76,000 $78,000 $81,000 $83,000 $85,000 $88,000

Total Cash Out $224,000 $490,000 $495,000 $500,000 $506,000 $511,000 $517,000 $523,000 $528,000 $534,000 $540,000 $546,000 $552,000 $558,000 $565,000 $571,000 $577,000 $584,000 $590,000 $597,000 $604,000 $610,000 $617,000 $623,000 $630,000 $636,000 $643,000 $650,000 $657,000 $664,000 $671,000

Annual Cash Flow ($224,000) $73,000 $75,000 $77,000 $80,000 $82,000 $84,000 $86,000 $88,000 $90,000 $92,000 $95,000 $97,000 $99,000 $101,000 $104,000 $106,000 $108,000 $111,000 $113,000 $116,000 $118,000 $121,000 $123,000 $125,000 $128,000 $130,000 $133,000 $135,000 $138,000 $469,000 Cumalative Cash Flow ($224,000) ($151,000) ($75,000) $2,000 $82,000 $163,000 $247,000 $333,000 $421,000 $511,000 $603,000 $698,000 $794,000 $893,000 $995,000 $1,098,000 $1,204,000 $1,313,000 $1,424,000 $1,537,000 $1,653,000 $1,771,000 $1,891,000 $2,014,000 $2,140,000 $2,268,000 $2,398,000 $2,531,000 $2,666,000 $2,804,000 $3,273,000

8/6/2010 Table D-5. Operating Revenues and Expenses for Equestrian Riding Stables

Year 0 123456789101112131415161718192021222324252627282930 REVENUES BY OPERATING DEPARTMENT Peak Rental $0 $251,000 $254,000 $258,000 $261,000 $264,000 $268,000 $271,000 $275,000 $278,000 $282,000 $286,000 $289,000 $293,000 $297,000 $301,000 $305,000 $309,000 $313,000 $317,000 $321,000 $325,000 $329,000 $333,000 $337,000 $341,000 $345,000 $349,000 $353,000 $358,000 $362,000 Off-Peak Rental $0 $44,000 $45,000 $45,000 $46,000 $46,000 $47,000 $48,000 $48,000 $49,000 $50,000 $50,000 $51,000 $51,000 $52,000 $53,000 $54,000 $54,000 $55,000 $56,000 $56,000 $57,000 $58,000 $58,000 $59,000 $60,000 $61,000 $61,000 $62,000 $63,000 $64,000 Special Events $0 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 Total Operating Revenues $0 $325,000 $329,000 $332,000 $336,000 $340,000 $344,000 $349,000 $353,000 $357,000 $361,000 $365,000 $370,000 $374,000 $379,000 $383,000 $388,000 $392,000 $397,000 $402,000 $407,000 $411,000 $416,000 $421,000 $425,000 $430,000 $435,000 $440,000 $445,000 $450,000 $455,000 EXPENSES $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Hay $0 $13,000 $13,000 $13,000 $13,000 $14,000 $14,000 $14,000 $14,000 $14,000 $14,000 $15,000 $15,000 $15,000 $15,000 $15,000 $16,000 $16,000 $16,000 $16,000 $16,000 $17,000 $17,000 $17,000 $17,000 $17,000 $18,000 $18,000 $18,000 $18,000 $19,000 Bedding $0 $5,000 $5,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $8,000 $8,000 $8,000 $8,000 Stall Cleaning $0 $16,000 $16,000 $17,000 $17,000 $17,000 $17,000 $18,000 $18,000 $18,000 $18,000 $18,000 $19,000 $19,000 $19,000 $19,000 $20,000 $20,000 $20,000 $20,000 $21,000 $21,000 $21,000 $21,000 $22,000 $22,000 $22,000 $23,000 $23,000 $23,000 $23,000 Vet / Farrier $0 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $4,000 $4,000 $4,000 $4,000 $4,000 Insurance $0 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 Manure Removal $0 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 Telephone $0 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 Utilities $0 $13,000 $13,000 $13,000 $14,000 $14,000 $14,000 $14,000 $14,000 $14,000 $15,000 $15,000 $15,000 $15,000 $15,000 $16,000 $16,000 $16,000 $16,000 $16,000 $17,000 $17,000 $17,000 $17,000 $17,000 $18,000 $18,000 $18,000 $18,000 $19,000 $19,000 Office $0 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 Repair / Maint. $0 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 Personnel Costs $0 $198,000 $198,000 $198,000 $198,000 $198,000 $198,000 $198,000 $198,000 $198,000 $198,000 $198,000 $198,000 $198,000 $198,000 $198,000 $198,000 $198,000 $198,000 $198,000 $198,000 $198,000 $198,000 $198,000 $198,000 $198,000 $198,000 $198,000 $198,000 $198,000 $198,000 Franchise Fee $0 $13,000 $13,000 $13,000 $13,000 $14,000 $14,000 $14,000 $14,000 $14,000 $14,000 $15,000 $15,000 $15,000 $15,000 $15,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $17,000 $17,000 $17,000 $17,000 $17,000 $18,000 $18,000 $18,000 $18,000 Annual Lease $0 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 Total Operating Expenses $0 $277,000 $278,000 $279,000 $280,000 $282,000 $283,000 $284,000 $285,000 $286,000 $287,000 $288,000 $289,000 $290,000 $292,000 $293,000 $294,000 $295,000 $296,000 $298,000 $299,000 $300,000 $301,000 $303,000 $304,000 $305,000 $306,000 $308,000 $309,000 $310,000 $312,000 Income Taxes (Federal & State) $0 $1,000 $2,000 $3,000 $3,000 $4,000 $5,000 $6,000 $6,000 $7,000 $8,000 $9,000 $9,000 $10,000 $11,000 $12,000 $13,000 $14,000 $15,000 $16,000 $17,000 $19,000 $20,000 $21,000 $23,000 $24,000 $26,000 $27,000 $29,000 $30,000 $32,000 Depreciation $0 $13,000 $13,000 $13,000 $13,000 $13,000 $13,000 $13,000 $13,000 $13,000 $13,000 $13,000 $13,000 $13,000 $13,000 $13,000 $13,000 $13,000 $13,000 $13,000 $13,000 $13,000 $13,000 $13,000 $13,000 $13,000 $13,000 $13,000 $13,000 $13,000 $13,000 Interest $12,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 Total Expenses $12,000 $320,000 $322,000 $324,000 $325,000 $327,000 $329,000 $331,000 $333,000 $334,000 $336,000 $338,000 $340,000 $342,000 $344,000 $346,000 $348,000 $351,000 $353,000 $356,000 $358,000 $360,000 $363,000 $365,000 $368,000 $371,000 $374,000 $376,000 $379,000 $382,000 $385,000 EBITDA $0 $47,000 $50,000 $53,000 $56,000 $59,000 $62,000 $65,000 $68,000 $71,000 $74,000 $77,000 $81,000 $84,000 $87,000 $90,000 $94,000 $97,000 $101,000 $104,000 $108,000 $111,000 $115,000 $118,000 $122,000 $125,000 $129,000 $132,000 $136,000 $140,000 $143,000 Net Profit ($12,000) $4,000 $6,000 $9,000 $11,000 $13,000 $15,000 $18,000 $20,000 $22,000 $25,000 $27,000 $30,000 $32,000 $35,000 $37,000 $40,000 $42,000 $44,000 $46,000 $49,000 $51,000 $53,000 $55,000 $57,000 $59,000 $62,000 $64,000 $66,000 $68,000 $70,000 Net Profit (% of Revenues) -- 1.3% 2.0% 2.6% 3.2% 3.9% 4.5% 5.1% 5.7% 6.3% 6.9% 7.4% 8.0% 8.6% 9.1% 9.7% 10.2% 10.7% 11.1% 11.6% 12.0% 12.4% 12.8% 13.2% 13.5% 13.8% 14.1% 14.5% 14.8% 15.1% 15.3%

8/6/2010 Table D-6. Cash-Flow Analysis for Equestrian Riding Stables

Year 0 123456789101112131415161718 19 20 21 22 23 24 25 26 27 28 29 30 Cash In Beginning Cash 0 (147,000) (134,000) (118,000) (101,000) (81,000) (59,000) (34,000) (8,000) 21,000 53,000 86,000 122,000 161,000 202,000 246,000 292,000 327,000 378,000 431,000 487,000 544,000 604,000 667,000 731,000 798,000 866,000 936,000 1,009,000 1,084,000 1,160,000 Sales 0 325,000 329,000 332,000 336,000 340,000 344,000 349,000 353,000 357,000 361,000 365,000 370,000 374,000 379,000 383,000 388,000 392,000 397,000 402,000 407,000 411,000 416,000 421,000 425,000 430,000 435,000 440,000 445,000 450,000 455,000 Other Revenues 0000000000000000000000000000000 Sale of Assets 000000000000000000000000000000195,000 Total Available Cash 0 178,000 195,000 214,000 236,000 259,000 286,000 314,000 345,000 378,000 414,000 452,000 492,000 535,000 581,000 629,000 680,000 720,000 775,000 833,000 893,000 956,000 1,020,000 1,087,000 1,157,000 1,228,000 1,301,000 1,376,000 1,454,000 1,534,000 1,810,000 Cash Out 0000000000000000000000000000000 Salaries 0 198,000 198,000 198,000 198,000 198,000 198,000 198,000 198,000 198,000 198,000 198,000 198,000 198,000 198,000 198,000 198,000 198,000 198,000 198,000 198,000 198,000 198,000 198,000 198,000 198,000 198,000 198,000 198,000 198,000 198,000 Other Operating Expenses 0 80,000 81,000 82,000 83,000 84,000 85,000 86,000 87,000 88,000 89,000 90,000 92,000 93,000 94,000 95,000 96,000 98,000 99,000 100,000 101,000 102,000 104,000 105,000 106,000 107,000 109,000 110,000 111,000 113,000 114,000 Loan Payments 12,000 33,000 33,000 33,000 33,000 33,000 33,000 33,000 33,000 33,000 33,000 33,000 33,000 33,000 33,000 33,000 33,000 33,000 33,000 33,000 33,000 33,000 33,000 33,000 33,000 33,000 33,000 33,000 33,000 33,000 33,000 Capital Expenditures 135,000 00000000000000013,000 00000000000000 Tax Payments 0 1,000 2,000 3,000 3,000 4,000 5,000 6,000 6,000 7,000 8,000 9,000 9,000 10,000 11,000 12,000 13,000 14,000 15,000 16,000 17,000 19,000 20,000 21,000 23,000 24,000 26,000 27,000 29,000 30,000 32,000 Total Cash Out 147,000 311,000 313,000 315,000 317,000 318,000 320,000 322,000 324,000 326,000 327,000 329,000 331,000 333,000 335,000 337,000 352,000 342,000 344,000 347,000 349,000 351,000 354,000 356,000 359,000 362,000 365,000 367,000 370,000 373,000 376,000 Annual Cash Flow (147,000) 13,000 15,000 18,000 20,000 22,000 24,000 27,000 29,000 31,000 34,000 36,000 39,000 41,000 44,000 46,000 35,000 51,000 53,000 55,000 58,000 60,000 62,000 64,000 66,000 68,000 70,000 73,000 75,000 77,000 274,000 Cumalative Cash Flow (147,000) (134,000) (118,000) (101,000) (81,000) (59,000) (34,000) (8,000) 21,000 53,000 86,000 122,000 161,000 202,000 246,000 292,000 327,000 378,000 431,000 487,000 544,000 604,000 667,000 731,000 798,000 866,000 936,000 1,009,000 1,084,000 1,160,000 1,434,000

8/6/2010